Global financial markets swung violently on Tuesday evening as President Donald Trump announced a “double-sided ceasefire” in the conflict with Iran.
The breakthrough, mediated by Pakistan, sent U.S. stock futures into a massive rally while crude oil prices collapsed from their daily highs. In a social media post confirming the development, Trump noted that the pause in hostilities is contingent upon “the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”
The impact on energy markets was instantaneous. U.S. crude oil, which had climbed as high as $117 per barrel earlier in the session, plummeted more than 15% to settle near $95.
Despite this dramatic single-day retreat, domestic crude prices remain up over 70% since the start of the year. The sell-off extended across the energy sector, with natural gas, wholesale RBOB gasoline, and heating oil all trading sharply lower following the news.
READ: Trump Halts Iran Strike Following Last-Minute Diplomatic Push
The Strait of Hormuz, a critical maritime artery that typically handles over 20% of the world’s oil supply, has been effectively paralyzed since early March. Tanker traffic stalled as vessels faced constant threats from drones and projectiles along the Iranian coast.
The prospect of reopening this waterway triggered a massive wave of relief on Wall Street. Dow futures surged by 1,000 points, while S&P 500 futures gained more than 2%. Tech-heavy Nasdaq 100 futures jumped 2.6%, and the Russell 2000 index futures rose 2.8%.
Investors also moved into precious metals as the broader market stabilized, with spot gold climbing 2.5% and silver rising 4.6%. Meanwhile, U.S. Treasury yields drifted lower, signaling a shift in risk sentiment as traders processed the potential for de-escalation.
The optimism is expected to carry into international sessions, with Japan’s Nikkei index indicated to open nearly 3% higher, and European markets braced for a similar move upward.
After a day of high tension and speculation over a potential escalation of the war, the announcement has provided at least a temporary reprieve for a global economy rattled by energy supply fears.
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