US Stocks Rise 2.7% as US and Iran Agree to Ceasefire, Oil Prices Decline to Near $90 Per Barrel

Global Markets Surge as Ceasefire with Iran Takes Effect

The global stock market has experienced a significant surge following the agreement between the United States, Iran, and Israel to a two-week ceasefire. This development came just hours before a deadline set by US President Donald Trump for Iran to open the Strait of Hormuz and allow oil to flow freely again from the Persian Gulf to customers worldwide.

The S&P 500 index leaped 2.7 percent after the announcement, with the Dow Jones Industrial Average jumping 1,350 points and the Nasdaq composite surging 3.4 percent. European and Asian markets also experienced significant gains, with major indices in Europe rising between two and five percent in mid-afternoon trade. Tokyo closed up 5.4 percent, while Chinese markets gained around three percent.

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The ceasefire has also led to a significant drop in oil prices, with the most widely traded oil contracts falling more than 15 percent to just above $90 a barrel. Despite this, energy costs and company valuations remain well above pre-war levels from late February.

The dollar, typically seen as a safe haven during periods of turmoil, retreated against the euro, yen, and British pound as investors shifted back to riskier assets. However, traders cautioned that the optimism may not last, with both sides warning of a return to hostilities if the two-week ceasefire fails to produce a broader agreement.

Most equity sectors posted strong gains, led by mining companies, banks, and airlines, with some companies rising more than 10 percent. Energy firms, however, declined after recent gains, with Shell falling over six percent in London, BP down more than seven percent, and TotalEnergies losing five percent. Despite the drop in oil and gas prices, the energy sector remains cautious, with traders warning that a return to hostilities could lead to a significant increase in energy costs and company valuations.