Global financial markets rallied on Wednesday after US President Donald Trump announced a two-week ceasefire with Iran. The agreement aims to facilitate the safe transit of oil and gas through the Strait of Hormuz, a vital maritime corridor that has been effectively closed since late February due to the conflict.
US crude futures dropped roughly 16.5 percent to $94 a barrel following the news. Meanwhile, S&P 500 futures rose more than 2 percent, and 10-year US Treasury futures gained approximately 15 ticks. The US dollar, which had served as a safe haven for investors throughout the recent geopolitical turmoil, fell broadly.
Trump stated late Tuesday that he had agreed to suspend military operations for two weeks while negotiations for a long-term peace agreement continue. The president noted that the US had received a 10-point proposal from Tehran, which he described as a "workable basis to negotiate."
For its part, Iran indicated it would halt attacks if reciprocal strikes against it ceased. The Iranian government confirmed that safe passage through the Strait of Hormuz would be maintained for the next two weeks in coordination with the Iranian Armed Forces.
Geopolitical tensions and public outcry
The breakthrough follows a period of extreme volatility. Since the US and Israel launched attacks on Iran at the end of February, oil prices experienced the steepest monthly increase in history, surging 50 percent in March.
Market analysts remain cautious despite the immediate relief. "Markets have been predicting that Trump was looking for an off-ramp in Iran," said Jamie Cox, managing partner at Harris Financial Group. "Today, he got one and took it."
IG analyst Tony Sycamore emphasized that while the announcement is a positive development, significant obstacles remain. "It’s a good start and could pave the way to a more permanent reopening – but lots of ifs still to work out," Sycamore wrote in a note.
The diplomatic pivot occurred mere hours after high-stakes rhetoric from the White House. On Tuesday, Trump posted on social media that "a whole civilisation will die tonight" if his demands were not met. This threat drew sharp condemnation from climate activist Greta Thunberg, who criticized the international community for what she termed a "muted" reaction to the potential destruction of civilian infrastructure. Thunberg stated that society has "normalised genocide" in the face of such threats.
