Oil falls below $100 and Dow futures soar 1,000 points on Iran ceasefire deal

President Donald Trump announced a two-week ceasefire with Iran late Tuesday, sending oil prices sharply lower and U.S. stock futures soaring after Pakistan brokered a last-minute agreement to allow negotiations to continue.

Trump said he would suspend bombing operations against Iran in exchange for Tehran agreeing to reopen the Strait of Hormuz. “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,” Trump said in a post on Truth Social. The deal came less than two hours before Trump’s 8 p.m. ET deadline for Iran to comply or face crippling strikes on civilian infrastructure.

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By shortly after 8 p.m. ET, WTI crude for May delivery had shed more than 16%, hitting $94.47 a barrel, while the international Brent benchmark for June settled more than 15% lower at $92.21. And by shortly after 10 p.m. ET, Dow futures were up almost 1,000 points, or 2.1%. S&P 500 futures added 2.3% and Nasdaq $NDAQ -1.71% futures soared about 3%.

Overseas, the announcement sparked a broad rally, with Tokyo’s Nikkei jumping 4.4% and Seoul’s Kospi climbing approximately 5%.

Iranian Foreign Minister Seyed Abbas Araghchi confirmed the arrangement, saying passage through the Strait “will be possible via coordination with Iran’s Armed Forces and with due consideration for technical limitations.” Iran would cease all “defensive operations” if attacks on the country by the U.S. and Israel were halted, he said.

Trump said Pakistan Prime Minister Shehbaz Sharif and Field Marshal Asim Munir had asked him to hold off the planned assault. Sharif separately posted on X $TWTR 0.00% that he had invited representatives from the U.S. and Iran to in-person talks in Islamabad later this week. Iran’s Supreme National Security Council said negotiations with the U.S. would begin Friday in Islamabad, and that the two-week ceasefire period could be extended if both sides agree, according to The Wall Street Journal.

The ceasefire came after weeks of market turbulence driven by the conflict, which began when the U.S. and Israel attacked Iran on Feb. 28. Tehran retaliated by going after commercial vessels moving through the Strait of Hormuz, a chokepoint that had accounted for roughly a fifth of the world’s oil supply before hostilities began. The disruption to global oil markets has been described as the largest in history, with analysts estimating a deficit of roughly nine million barrels a day even after emergency stockpile releases and pipeline rerouting. Oil prices had briefly topped $114 a barrel earlier this week as Trump threatened to strike Iranian power plants and bridges.

Trump had issued and then extended similar deadlines before, and previous presidential statements about negotiations had triggered violent market swings only to be contradicted by Iranian officials. What set Tuesday’s announcement apart was a swift public endorsement from Iran’s own side.

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