Dow Jones futures jumped over 1,000 points in after-hours trading, while S&P 500 futures climbed 2.4 percent and Nasdaq 100 futures rose nearly 3 percent. In Asia-Pacific, Japan’s Nikkei 225 rose 4.5 percent, South Korea’s Kospi gained 5.5 percent, and Hong Kong’s Hang Seng was up 2.8 percent by Wednesday morning. Gold and silver, which had surged during the crisis period, also jumped on the ceasefire news, with spot gold rising 2.5 percent.
The oil market reaction was swift and dramatic. Brent crude, the global benchmark, fell as much as 16 percent to around $92 per barrel, while US West Texas Intermediate crude slid to below $95 per barrel, down from a Tuesday intraday high of $117. Despite the sharp drop, crude prices remain more than 70 percent above where they stood at the start of the conflict in late February, when oil traded around $67 per barrel.
UK government bonds surged, with 10-year gilt yields falling as much as 21 basis points. British Prime Minister Keir Starmer welcomed the ceasefire, calling it ‘a moment of relief for the region and the world.’ The European Central Bank and Bank of England are now expected to recalibrate their tightening cycles as energy-driven inflation pressure eases.
Despite the optimism, energy analysts urge caution. Iran’s ceasefire statement includes conditions around Iranian military coordination of all strait traffic, and experts note that reestablishing tanker insurance protocols and logistics pipelines will take at minimum several days. US gasoline prices at $4.14 per gallon are unlikely to fall quickly. The two-week window is as much a test of diplomacy as it is a pause in hostilities.
