Oil, stocks and crypto jump on US-Iran truce

The United States and Iran agreed to a two-week ceasefire that will see Tehran temporarily reopen the Strait of Hormuz, easing fears of an imminent escalation in the conflict. The announcement came on April 7, shortly before an 8 p.m. ET deadline set by U.S. President Donald Trump for Iran to end its blockade of the key waterway or face major attacks.

In a Truth Social post, Trump said that, subject to Iran agreeing to the "COMPLETE, IMMEDIATE, and SAFE OPENING" of the Strait of Hormuz, he would "suspend the bombing and attack of Iran for a period of two weeks." He described the arrangement as a "double sided CEASEFIRE" and said military objectives had been met and that a 10-point proposal from Iran was a "workable basis" for negotiations.

Iranian Foreign Minister Seyed Abbas Araghchi confirmed the arrangement, saying safe passage through the Strait would be possible via coordination with Iran's armed forces and within technical limits. He said Iran would halt "defensive operations" if attacks by the U.S. and Israel stopped.

Trump said the decision followed conversations with Pakistan's Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, who requested that he delay the planned assault. Sharif said Pakistan had played a mediating role and that the ceasefire would start immediately.

Sharif posted that he had invited representatives from the U.S. and Iran to in-person talks in Islamabad later in the week. Iran's Supreme National Security Council said negotiations with the United States 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 as cited in one report.

The ceasefire announcement triggered a sharp reversal in oil markets, which had been roiled by more than five weeks of war and a blockade of the Strait of Hormuz. Before the deal, WTI crude (USOIL) had traded near $115 per barrel after hostilities disrupted the passage of about 20% of global oil flows.

WTI crude (USOIL) for May delivery had dropped more than 16% to $94.47 a barrel, while Brent (UKOIL) fell more than 15%. Another report said West Texas Intermediate lost almost 20% and Brent (UKOIL) as much as 16% as investors reacted to the ceasefire.

The decision also hit the U.S. dollar, which had acted as a safe haven during the conflict. The yen, euro and pound strengthened, while gold rallied around 5% after earlier pressure from inflation concerns. Analysts cited fears that the war-driven supply shock could have kept interest rates elevated.

Equity markets around the world rallied strongly on the news, reflecting relief that the crisis might ease. Dow futures jumped almost 1,000 points, or 2.1%, while S&P 500 (SPX) futures rose 2.3% and Nasdaq futures gained about 3%.

Asian markets saw particularly strong moves, with Tokyo's Nikkei rising around 4.4% to more than 5%, according to different reports, and Seoul's Kospi climbing approximately 5%. Taipei added nearly 4%, while Sydney and Hong Kong advanced more than 2%. Shanghai, Singapore and Wellington also traded sharply higher.

Bitcoin and XRP also surged after Trump's announcement that he would suspend attacks on Iran for two weeks. One report noted that fears of escalation had abated for now, contributing to a broader risk-on move that extended from stocks to cryptocurrencies.

The ceasefire followed weeks of market turmoil after the U.S. and Israel attacked Iran on February 28. Tehran retaliated by targeting commercial vessels moving through the Strait of Hormuz, a chokepoint that had previously handled roughly a fifth of the world's oil supply.

The resulting disruption has been described as the largest in oil market history, with analysts estimating a deficit of about nine million barrels a day even after emergency stockpile releases and pipeline rerouting. Oil prices had briefly topped $114 per barrel earlier in the week as Trump threatened to strike Iranian power plants and bridges.

Earlier on April 7, Trump warned on social media that "a whole civilization will die tonight" if Iran did not agree to reopen the Strait, intensifying fears until the late announcement of the ceasefire and reopening agreement.