Oil prices tumbled more than 15%, and U.S. stock futures surged Tuesday evening after US President Donald Trump announced a two-week ceasefire with Iran, averting a threatened deadline to destroy the country’s civilian infrastructure.
West Texas Intermediate crude plunged to $95.63 per barrel in after-hours trading, while Brent fell to around $91, the steepest one-day drop in months. S&P 500 futures jumped 1.9%, Nasdaq 100 futures rose 2.2%, and Dow futures gained 1.8%, reversing a flat close in regular trading amid earlier volatility.
The de-escalation capped a day of dramatic reversals. Trump had warned on Truth Social that Iran faced annihilation if it didn’t reopen the Strait of Hormuz by 8 p.m. ET, a chokepoint responsible for one-fifth of global oil flows. European markets had closed lower, with the Stoxx 600 down nearly 1%.
Ceasefire Terms and Pakistan’s Brokerage
Under the deal, Trump suspended airstrikes for two weeks, pending Iran’s “COMPLETE, IMMEDIATE, and SAFE OPENING” of the strait. Iran submitted a 10-point peace proposal, which the president called a “workable basis.” Tehran confirmed it would halt “defensive operations” and ensure safe passage via coordination with its forces.
Pakistani Prime Minister Shehbaz Sharif was pivotal, urging a delay for diplomacy, per reports from CNBC and Fox News.
From Threats to Truce: Market Caution Persists
The shift followed Trump’s midday post: “a whole civilization will die tonight, never to be brought back again.” Relief was swift but tempered. Richard Harris, CEO of Port Shelter Investment Management, called the rally a potential “phony” move, citing unresolved risks.
“Substantial hurdles remain before a lasting deal,” Harris told CNBC. “This buys time, but markets hate uncertainty. Watch oil inventories and Hormuz tanker traffic closely.”
Investors now eye Wednesday’s open, with inflation data and Fed speakers on deck. Oil’s slide eases pressure on consumers but spotlights energy sector volatility.
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