Global Markets Surge as U.S. and Iran Agree to Ceasefire; Oil Plunges 14%

Global markets rallied sharply after the United States and Iran agreed to a two‑week ceasefire brokered by Pakistan, easing fears of a prolonged conflict in the Persian Gulf. The deal includes the reopening of the Strait of Hormuz under Iranian supervision — a key route for global oil shipments that had been partially blocked during hostilities.

The breakthrough ignited a wave of relief across financial markets. European stocks jumped 4.5%, while Asian and Japanese shares rose more than 3%. In commodities, Brent crude tumbled 14% to $94 a barrel, erasing weeks of war‑driven gains. U.S. stock futures climbed between 2% and 3%, pointing to a strong rebound on Wall Street.

The U.S. dollar fell to a four‑week low and government bonds rallied on both sides of the Atlantic, as investors bet the truce would ease inflationary pressures sparked by the energy crisis. The ceasefire terms include Washington’s acknowledgment that Iran’s 10‑point plan — including phased sanctions relief — will serve as the basis for formal negotiations.

Analysts said the shift marks the first concrete diplomatic opening since the conflict began, with the White House and Tehran expected to continue talks under Pakistani mediation over the next fortnight.

Despite the market euphoria, the real economy remains under strain. Ryanair announced broad flight cancellations across Europe, citing lingering logistics disruptions and volatile fuel supplies. Economists warned that even if the ceasefire extends, it will take months for trade flows, shipping insurance, and supply chains to normalize.

Separately, political sentiment in Asia turned cautiously hopeful after a delegation from Taiwan’s opposition Kuomintang party arrived in Beijing for meetings with President Xi Jinping. The visit — the first of its kind in years — has raised speculation about renewed dialogue and prospects for peaceful cross‑strait relations.

The dual developments — a truce in the Middle East and tentative rapprochement in the Taiwan Strait — have fueled the most dramatic global market rebound in months, shifting investor attention from crisis hedging to the potential for a broader geopolitical reset.