Global markets reacted sharply after President Donald Trump announced a pause in the US attacks on Iran, just before his 8 PM ET deadline on Tuesday. There was a steep decline in oil prices as equity markets futures surged. Iran is yet to respond to Trump's message about the ceasefire.
What Trump said about the ceasefire
Announcing a two-week ceasefire, Trump said: “Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!”
He further added that the US has ‘met and exceeded’ all military objectives. We ‘are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East’.
{{/usCountry}}He further added that the US has ‘met and exceeded’ all military objectives. We ‘are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East’.
{{/usCountry}}Read More: Why Trump agreed to a ceasefire with Iran. Pak's Shehbaz Sharif, Asim Munir get special mention
“We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated. On behalf of the United States of America, as President, and also representing the Countries of the Middle East, it is an Honor to have this Longterm problem close to resolution. Thank you for your attention to this matter!”
Oil prices drop
US crude benchmarks fell significantly following the announcement. West Texas Intermediate (WTI) dropped sharply, with prices sliding toward the $103–$105 range shortly after markets opened.
The decline, estimated between 7% and 9%, reflects expectations that Gulf oil and gas exports could stabilize if tensions continue to ease.
Stocks surge, safe-haven assets gain
Equity markets rallied on the news, with S&P 500 futures jumping around 1.6% as investors shifted back toward risk assets. Asian markets also signaled gains after weeks of pressure tied to rising oil prices and geopolitical uncertainty.
At the same time, US Treasury futures climbed, indicating strong demand for bonds even as broader sentiment improved.
Read More: 'Civilizations don't die by bombing': Iran embassies respond to Trump's threat
Currency and crypto markets join the rally
The shift in sentiment extended across currencies and digital assets. The Australian dollar rose more than 0.8%, while the euro gained ground against the US dollar.
Cryptocurrencies also moved higher, reflecting renewed investor appetite for risk amid hopes that a wider regional conflict may be avoided.
What’s driving the oil plunge?
At its core, the drop in oil prices is tied to one key factor: reduced supply risk.
With the Strait of Hormuz no longer facing immediate disruption and a temporary ceasefire in place, traders are recalibrating expectations around global oil flows.