Global markets reacted sharply after President Donald Trump announced a pause in US attacks on Iran shortly before his 8 PM ET deadline on Tuesday. Oil prices fell steeply while stock market futures surged. Iran has not yet responded to Trump’s ceasefire message.
What Trump said about the ceasefire
Announcing a two-week ceasefire, Trump said, “Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!”
He added that the US has “met and exceeded” all military objectives and said the country is “very far along with a definitive Agreement concerning long-term PEACE with Iran, and PEACE in the Middle East”.
Trump also said, “We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated. On behalf of the United States of America, as President, and also representing the Countries of the Middle East, it is an Honor to have this Longterm problem close to resolution. Thank you for your attention to this matter!”
Oil prices fall sharply
US crude oil prices dropped significantly after the announcement. West Texas Intermediate (WTI) fell quickly, with prices moving towards the $103–$105 range soon after markets opened.
The fall, estimated at around 7% to 9%, shows that traders expect Gulf oil and gas exports to stabilise if tensions continue to ease.
Stocks rise as investor confidence improves
Stock markets rallied on the news. S&P 500 futures rose by about 1.6% as investors returned to riskier assets. Asian markets also signalled gains after weeks of pressure caused by rising oil prices and geopolitical tensions. At the same time, US Treasury futures climbed, showing strong demand for bonds even as overall market sentiment improved.
Currency and crypto markets move higher
The positive mood spread to currency and cryptocurrency markets. The Australian dollar rose by more than 0.8%, while the euro strengthened against the US dollar. Cryptocurrencies also moved higher as investors showed renewed confidence and hoped that a wider regional conflict could be avoided.
Why oil prices dropped
The main reason for the fall in oil prices is reduced supply risk. With the Strait of Hormuz no longer under immediate threat and a temporary ceasefire in place, traders are adjusting their expectations about global oil supply and transport.
