Markets rally on ceasefire hopes as oil plunges
Global markets saw a sharp relief rally after Donald Trump agreed to a two-week ceasefire with Iran, conditional on the reopening of the Strait of Hormuz.
US equities rebounded strongly, with the S&P 500 erasing a 1.2% decline on Tuesday evening as Brent crude fell as much as 16% following the announcement. Bond yields and the dollar also moved lower, while sterling gained nearly 1% against the greenback.
Asian markets followed suit, with Japan’s Nikkei 225 rising 5.4% to 56,322 and Hong Kong’s Hang Seng advancing 2.8% to 25,821.
In commodities, Brent crude plunged to $93.92 per barrel from $110.24, its lowest level since March, while gold surged to $4,823.81 per ounce, marking its highest level since mid-March.
In a post on Truth Social, Donald Trump said the US was “loading up with supplies of all kinds” and would continue to maintain a presence in the Gulf to ensure stability.
He described the situation as “a big day for world peace,” adding that Iran “has had enough” of the conflict. Trump also said the US would assist in managing traffic through the Strait of Hormuz, signalling “lots of positive action” and suggesting there would be “big money to be made.”
