Oil prices slumped and stocks rallied on Tuesday after former U.S. President Donald Trump announced a ceasefire agreement between Israel and Iran, fueling optimism that the prolonged Middle East conflict may be winding down.
In early Asian trading, Brent crude, the global oil benchmark, fell by nearly 5%, slipping below levels last seen on June 12, the day of Israel’s strikes on Iranian nuclear sites. The ceasefire news offered a relief rally across equity markets, with S&P 500 futures climbing 0.5% and MSCI’s Asia Pacific index recording its biggest gain in seven weeks.
The U.S. dollar weakened against all major currencies, and gold, a traditional safe haven, slid as much as 1%, as investors shifted back to risk assets amid renewed calm.
Trump made the announcement via his Truth Social platform following Iran’s missile strike on a U.S. base in Qatar on Monday. The strike was reportedly pre-warned and interpreted by analysts as largely symbolic, minimizing market panic and pushing the S&P 500 to a 1% gain on Monday.
“Following President Trump’s announcement of a provisional ceasefire, market uncertainty has temporarily eased,” said Tomo Kinoshita, Global Market Strategist at Invesco Asset Management, Tokyo.
While analysts welcomed the truce, they also warned that geopolitical risks in the region remain fluid, urging investors to stay cautious amid ongoing diplomatic developments.
