Following President Donald Trump’s announcement of a two-week truce with Iran on Tuesday night, oil prices fell below $100 per barrel, and U.S. stock futures surged as the president withdrew from an 8 p.m. ET deadline that had threatened to destroy Iranian civilian infrastructure. The announcement, delivered on Truth Social at approximately 6:30 p.m. ET, marked a significant departure from the hours of escalating threats that had shaken international markets all day.
Markets Respond To De-Escalation
According to CNBC and Yahoo Finance, West Texas Intermediate crude plummeted over 15% to $95.63 per barrel during after-hours trade, while Brent crude sank roughly 16% to about $91. Following weeks of high prices caused by Iranian restrictions on shipping through the Strait of Hormuz, which resulted in what CNBC called “the largest disruption of crude supplies in history,” there was a significant drop.
According to Yahoo Finance, S&P 500 futures increased by 1.9%, Nasdaq 100 futures increased by 2.2%, and Dow Jones Industrial Average futures increased by about 1.8%. After a turbulent day, markets ended the regular session largely unchanged, with the S&P 500 and Nasdaq. As late purchases erased earlier losses brought on by Trump’s intensifying rhetoric, the composite each finished up just 0.1%.
Terms Of The Ceasefire And Pakistan’s Part
As part of the deal, Trump promised to halt airstrikes against Iran for a period of two weeks, provided Iran agreed to a “COMPLETE, IMMEDIATE, and SAFE OPENING” of the Strait of Hormuz. He revealed that Iran has offered “a workable basis on which to negotiate” in the form of a 10-point peace proposal.
According to CNBC and Fox News, Pakistani Prime Minister Shehbaz Sharif was instrumental in mediating the extension by pleading with Washington to postpone strikes while diplomacy persisted. In a separate statement, Iran acknowledged the truce, stating that “safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces” and that its armed forces would “cease their defensive operations” if strikes were stopped.
From Threats Of Annihilation To Diplomacy
Trump stated on Truth Social earlier on Tuesday that “a whole civilization will die tonight, never to be brought back again” if Iran did not reopen the waterway by his deadline. The ceasefire was a dramatic shift from that statement. Due to the uncertainty, European markets ended Tuesday lower, with the Stoxx 600 finishing almost 1% lower. The rise might not last long, analysts warned. The CEO of Port Shelter Investment Management, Richard Harris, cautioned that the market response might be a “phony rally,” pointing out that there are still significant dangers before a long-term deal is struck.