Global stock markets rallied and oil prices fell as the US Iran conflict appeared to de-escalate. President Donald Trump said he would delay a strike on Iran for two weeks, reversing his earlier ultimatum to Tehran. Near 8:00 a.m. local time in Vietnam, Dow Jones futures were up over 1.8 percent, S&P 500 futures up 2.1 percent, and Nasdaq futures up nearly 2.8 percent.
Brent crude futures in London fell by 14.95 dollars per barrel from the previous close, down 13.6 percent, to 94.44 dollars per barrel. WTI futures fell 15.97 dollars, down 14.14 percent, to 96.99 dollars per barrel. In a Truth Social post late Tuesday local time, Trump said he had agreed to delay attacking Iran’s infrastructure for two weeks, with the decision made on the condition that Iran agrees to fully open, immediately and safely the Hormuz Strait. The statement came less than two hours before the deadline he had set for Iran to reach a deal to end the Hormuz blockade or face strong US attacks on its civilian infrastructure. He noted that the decision was based on discussions with Pakistan’s Prime Minister Shehbaz Sharif and Army Chief of Staff Asim Munir. This will be a ceasefire from both sides, Trump said, and negotiations between the US and Iran would begin on Friday in Islamabad, Pakistan. Before the move cooled the market, major US indices closed Tuesday’s session unevenly: the S&P 500 rose 0.08 percent to 6,616.85; Nasdaq rose 0.1 percent to 22,017.85; Dow fell 0.18 percent to 46,584.46. Brent finished Wednesday with a drop of 0.50 dollars per barrel to 109.27, while WTI rose 0.54 dollars to 112.95. After Trump’s post about delaying the attack, Iranian Foreign Minister Seyed Abbas Araghchi said the country will allow ships to pass safely through the Hormuz Strait during the truce, provided ships coordinate with Iran’s armed forces and comply with technical limits. If attacks resume, our armed forces will pause the defensive campaign, Araghchi wrote on social media. Asian stock markets also opened higher: the ASX 200 up more than 2.5 percent, the Nikkei 225 up more than 4.4 percent, and the Kospi up 5.3 percent. Earlier, global investors had feared that high oil prices would push global inflation higher; Josh Rubin of Thornburg Investments told CNBC that energy prices may fall and inflation risk will ease, which bodes well for central banks to cut rates. Oil had already risen more than 50 percent since before the US Iran conflict began. Investors’ concern now is whether the two-week ceasefire will lead to a real solution to the conflict, said Jay Woods, chief strategist at Freedom Capital Markets.
