Stocks Rally and Oil Prices Plunge on US-Iran Ceasefire
Posititive Market Reaction to US-Iran Ceasefire
Global stock markets rallied strongly after signs of a ceasefire agreement between the US and Iran, despite lingering questions about its durability. Major indexes in the US, Europe and Asia posted multi-percent gains. President Trump announced a temporary suspension of strikes tied to Iran opening the Strait of Hormuz, while Iran said it would agree to a ceasefire if attacks on Iran stop and safe passage through the strait is ensured. Key points:
- US markets: S&P 500 +2.5%, Dow and Nasdaq +2.8%.
- Europe: FTSE 100 +2.5%, CAC 40 +4.5%, Dax +4.7%. European markets saw their biggest one-day gains of the year, and energy prices fell (Brent/WTI down double digits to about $100/barrel).
- Asia-Pacific: Nikkei +5.4%, Kospi +6.8%, Hang Seng +3%, ASX 200 +2.5%.
- Sector winners: Industrials, transports, semiconductors, airlines, cruise lines, travel and homebuilders led gains; Delta, Southwest, United, Carnival, Norwegian and Levi Strauss among notable risers.
- Fed outlook: March minutes indicate policymakers more open to further rate hikes due to higher inflation expectations tied to the conflict.
- Trump tweeted a two‑week suspension of bombing/attacks if Iran agrees to fully and safely open the Strait of Hormuz; set a deadline and warned of severe consequences otherwise.
- Iran’s foreign minister said Tehran would accept a ceasefire if attacks against Iran stop and safe passage through the Strait of Hormuz can be guaranteed.
Aside from the market indices, some stocks jumped or dropped significantly on the news of the ceasefire. Please access the links below:
Disclosure: We held positions on these two stocks as we were long AAL and short BP. Additional stocks are shown below:
The oil and energy stocks dropped since oil prices came down. Other big names such as Apple and NVIDIA moved less than the airlines for example. Also notice how the rally or drop in these stocks has faded or reversed due to uncertainty.
Amid Uncertainty Stocks Now Retreat from Relief Rally
Initial reaction, European stocks fell Thursday after a fragile U.S.–Iran ceasefire showed early signs of strain. The pan‑European Stoxx 600 was down about 0.6% midmorning in London, with the FTSE 100 off 0.2%, France’s CAC 40 down 0.8% and Germany’s DAX sliding 1.2%. Travel and leisure names were hit hardest after some gains were pared back. Iran’s parliamentary speaker accused the U.S. of violating the ceasefire less than 24 hours after it was agreed, while the U.S. kept military forces in the region and warned that any breach would prompt a major response. Asian markets also fell, led by South Korea and Japan, following a strong European rally the previous day. Key points
- Stoxx 600 down ~0.6%; FTSE 100 −0.2%, CAC 40 −0.8%, DAX −1.2%.
- Travel and leisure stocks (e.g., Lufthansa, Tui) gave back earlier gains.
- Iran’s parliamentary speaker accused the U.S. of violating the ceasefire; tensions persist with Israel’s actions and airspace/drone incidents cited.
- S. maintains military presence near Iran and warned of a strong response if the truce is breached.
- Asian markets slid (South Korea Kospi −1.53%, Kosdaq −1.38%; Japan Nikkei −0.77%).
