Iran has reportedly agreed to a two-week ceasefire agreement, which was confirmed by both Iranian and U.S. officials, including a statement from U.S. President Donald Trump suspending planned attacks on Iranian infrastructure for two weeks, contingent on Iran allowing a 'COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz' [1][2]. Iranian Foreign Minister Abbas Araghchi stated on X that Tehran would halt 'defensive operations' and that safe passage for ships through the Strait of Hormuz would be possible for the next two weeks in coordination with the country's armed forces [2].
The announcement of the ceasefire had an immediate and significant impact on global markets. Oil prices dropped sharply, with Brent crude and WTI futures both declining in response to the news [1]. The West Texas Intermediate contract fell more than 14% to $96.98 per barrel, plunging below the $100 mark [2]. Market analysts noted that the ceasefire could provide short-term relief in oil markets, with technical outlooks suggesting that if the ceasefire holds, support levels for oil prices may be tested, while any breakdown in the agreement could lead to renewed upward pressure on prices [1].
The ceasefire also sparked a relief rally across risk assets, with equities surging globally. South Korea's Kospi jumped over 5%, the Kosdaq rose 3.4%, Japan's Nikkei 225 climbed 4%, and the Topix was up 3.2%. Australia's S&P/ASX 200 advanced 2.7%, Hong Kong's Hang Seng Index gained more than 2%, and mainland China's CSI 300 rose 2.15% [2]. In the U.S., Dow Jones Industrial Average futures rose by 967 points (2.1%), S&P 500 futures added 2.1%, and Nasdaq 100 futures climbed 2.3%. Bitcoin also increased by more than 2% to $71,508 [2].
Despite the rally in risk assets, safe havens such as gold and U.S. Treasurys continued to attract inflows. Spot gold rose 2.2% to $4,803.83 per ounce, and gold futures increased over 3% to $4,835.90. Yields on 10-year and 2-year U.S. Treasurys fell by 9 basis points to 4.253% and 4.839%, respectively, while 30-year yields dropped 7 basis points to 4.851% [2]. Investment strategist Billy Leung of Global X ETFs commented that the market is experiencing a relief rally layered on top of a fragile macro backdrop, with investors tactically adding risk but maintaining defensive positions due to ongoing uncertainty [2].
Analysts highlighted that while the ceasefire and falling oil prices may ease immediate inflation fears, broader economic concerns remain unresolved, with growth concerns building alongside the inflation shock caused by earlier energy price spikes [2]. Traders are advised to monitor developments closely, as the geopolitical situation remains fluid and could impact market sentiment and price direction [1].
CONCLUSION
The two-week ceasefire agreement between the U.S. and Iran has triggered a sharp drop in oil prices and a global rally in equities, while safe-haven assets like gold and Treasurys continue to see demand. Market participants remain cautious, balancing tactical risk-taking with defensive hedges amid ongoing geopolitical and macroeconomic uncertainty. The situation remains fluid, and further developments could quickly shift market sentiment.