Global markets are seeing a relief rally as the US-Iran ceasefire eases immediate geopolitical fears. Stocks are rising and oil prices are dropping towards $90, while safe-haven assets are gaining strength, with gold rising 2%, and silver prices jumping over 5%.
US markets have opened strongly on Wednesday, after President Donald Trump delayed his threat to strike Iranian infrastructure by two weeks, announcing what he called a “double-sided ceasefire.”
The Dow, S&P 500, and Nasdaq were all up more than 2.5%. Dow is up more than 1,200 points, the S&P 500 is rallying over 2.5%, and the Nasdaq Composite gained more than 700 points, jumping more than 3.25%.
“The reopening of the Strait of Hormuz and the two-week ceasefire have clearly taken away the immediate worst-case risk for global markets. The relief rally across equities and easing bond yields is ongoing, but it is important to note that this is still a pause in escalation rather than a structural resolution, and markets will remain highly sensitive to any reversal in the ceasefire,” says Viram Shah, Co-Founder and CEO, Vested Finance.
As part of the understanding, Iran has agreed to reopen the Strait of Hormuz for two weeks if all strikes are ceased, with the caveat that transit must be arranged with Iran’s Armed Forces. Israel has apparently agreed to the ceasefire as well.
Oil price, which was below $70 before the Iran war and went as high as $119, dropped by 15% towards $90 following the announcement of the opening of the Strait of Hormuz. “Even now, despite crude prices falling back below $100, refined fuel supply chains and shipping confidence are expected to take weeks, if not months, to normalize. This suggests that while headline inflation pressures may cool in the near term, the transmission into lower fuel and logistics costs could be more gradual than markets are currently pricing in,” adds Shah.
“If progress towards a durable agreement emerges, the rally can extend and broaden. Industrial stocks, emerging markets, and cyclicals would then have room to catch up. Failure to convert this pause into a longer-term framework would reverse sentiment just as quickly. Volatility would return, oil would spike again, and equities would give back gains. This is a powerful rebound driven by the removal of immediate fear. Yet the underlying issues remain unresolved.
Investors should participate in the upside, while recognising that the next phase depends entirely on whether diplomacy can deliver substance beyond a temporary halt,” says Nigel Green, CEO, deVere Group.
Market experts caution that the recent relief rally in stocks should be approached carefully. Much depends on the outcome of the Iran war, which ‘technically’ is still not over. Pricing of assets will continue to be influenced by news flow from the Middle East and Trump’s Truth Social platform.
“The current market move is less about a structural improvement and more about unwinding extreme risk positioning, and the key from here will be whether the ceasefire evolves into a more durable agreement. Until then, markets are likely to remain event-driven, with the potential for equally sharp repricing across oil, inflation expectations, and risk assets if tensions escalate again,” cautions Shah.
FOMC Meeting Minutes
Meanwhile, markets await the release of the minutes of the last Federal Open Market Committee (FOMC) meeting held in March. The minutes of the FOMC meeting held on March 17-18 will be released at 2:00 p.m. on April 8.
As expected, the Federal Reserve kept rates unchanged on March 18. In the press conference following the March 18 announcement, Powell forecasted increased inflation, stable unemployment, and a single rate cut this year, citing economic concerns from the US and Israel’s war with Iran.
In the March 17-18 FOMC meeting, voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Beth M. Hammack; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; Anna Paulson; and Christopher J. Waller.
The only member voting against this action was Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting.
The upcoming minutes are expected to provide deeper insight into the reasons and discussions shaping the decision-making of Fed members.
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