The announcement came less than two hours before US President Donald Trump’s deadline, in a sharp turnaround from his previous warning of wiping out “a whole civilization” if Tehran did not reopen the Strait of Hormuz, the narrow waterway that typically handles about one-fifth of global oil trade.
Global assets staged a sharp rally: Equity indexes in Asian and European markets climbed between 4% and 5%, while crude prices slid 16% to nearly US$90 a barrel. The dollar, which had attracted safe-haven interest over the past month, weakened 1% against the Japanese yen.
“The rally will need to be backed up by tangible progress in negotiations to hold. The underlying question of whether Iran will permanently reopen the Strait of Hormuz and whether a lasting deal can be reached is still very much unresolved,” said Josh Gilbert, market analyst for eToro.
“If the two weeks pass without a deal, expect a sharp and unforgiving reversal of this relief rally.”
The ceasefire brought immediate relief to investors after weeks of conflicting signals from Trump and Iran that had dragged the conflict into a second month.
At 04:05 a.m. ET, Dow E-minis YMcv1 were up 1,045 points, or 2.23%, S&P 500 E-minis EScv1 were up 162.25 points, or 2.44%, and Nasdaq 100 E-minis NQcv1 were up 771.25 points, or 3.16%.
Futures tracking the rate-sensitive Russell 2000 Index RTYcv1 jumped 3.6% while the CBOE Volatility Index slumped 5.01 points to 20.77, its lowest point in more than two weeks.
US energy stocks tracked global oil prices and tumbled in premarket trading. Shares of Exxon Mobil shed 6.2%, Chevron dropped 5.4%, and Occidental Petroleum lost 7.8%.
Stocks linked to travel and leisure sectors edged higher. Shares of American Airlines and Delta Airlines jumped 7.3% and 6.8%, respectively, while cruise operators Carnival and Norwegian Cruise Line Added 9.4% and 8.1%, respectively.
Big banks also nudged higher prior to the bell, with JPMorgan Chase, Bank of America and Wells Fargo up more than 2% each.
Beyond the immediate relief, global investors remain keen to see whether the ceasefire leads to a broader resolution before placing major bets.
Still, concerns persisted that a prolonged conflict and soaring energy costs could weigh on economic growth and complicate the Federal Reserve’s monetary policy trajectory. In March, the benchmark S&P 500 posted its biggest monthly fall in a year.
Short-term Treasury yields slipped on Wednesday, while interest-rate futures show investors see a 56% chance of a 25-basis-point cut by the end of 2026, according to LSEG-compiled data.
Before the war erupted, traders had been betting on at least two 25-basis-point interest rate cuts this year.
Later in the day, investors will parse comments from Fed policymakers Mary Daly and Christopher Waller, and minutes from the central bank’s March 17-18 meeting.