Trump-Iran 2-week ceasefire: Markets cheer, oil tumbles sharply

Markets reacted strongly after reports that President Donald Trump and Tehran had accepted a Pakistani-brokered plan for a two-week ceasefire linked to reopening the Strait of Hormuz. The news triggered a risk-on move in equity futures and a steep sell-off in oil, as investors priced a temporary easing of the largest supply risk in recent weeks.

The sequence unfolded late in the trading day when Mr. Trump announced on social media that he would suspend planned strikes for two weeks provided Iran agreed to allow safe passage through the strait. Pakistan’s prime minister publicly urged both sides to accept a two-week window for diplomacy, and Iranian officials signaled they were positively reviewing the proposal; Iran’s Supreme National Security Council was reported to have accepted the framework. Those diplomatic signals arrived amid intense prior threats and limited strikes on Iranian infrastructure.

The immediate market response was pronounced. U.S. crude futures plunged into double-digit percentage declines intraday and Brent futures also fell sharply, while S&P 500, Dow and Nasdaq futures climbed as risk sentiment improved. Treasury yields eased as investors shifted marginally out of safe-haven assets; volatility spiked prior to the announcement and subsided somewhat on the ceasefire reports. Commodity and equity markets reflected the sudden re-pricing of a major geopolitical risk factor.

Strategically, the Strait of Hormuz’s role as a conduit for roughly one-fifth of the world’s oil made the development particularly significant: any reliable reopening reduces the near-term probability of sustained global supply disruptions that had been driving elevated energy premia. Nonetheless, the episode underlined how fragile supply assumptions remain and why regional diplomatic channels — including Pakistan’s mediation — have become central to near-term risk management.

Market strategists caution that while a two-week truce would ease immediate pressures, it is not a structural solution. Short-term trading flows will favor energy-sensitive and cyclical sectors if the ceasefire holds, but a failure to implement full, verifiable reopening of shipping lanes would likely prompt renewed price spikes and wider market stress. Investors and policymakers will watch subsequent diplomatic steps, Hürmüz’ün fiili durumu and on-the-ground confirmations before treating the episode as a lasting de-risking of global energy markets.