Stock markets jumped Tuesday after U.S. President Donald Trump announced a ceasefire in the Israel-Iran conflict. It gave investors a sense of hope—at least on paper.
Trump posted on Truth Social that Israel and Iran had agreed to a “complete and total ceasefire.” This came hours after Iran launched missile strikes on a U.S. military base in Qatar. The attack was a response to America bombing Iranian nuclear sites over the weekend.
But while Trump’s post claimed the ceasefire would start around midnight Eastern time, the situation on the ground remained unclear. Israel didn’t immediately confirm the deal. And missile attacks hadn’t stopped.
Still, stock markets rallied across the world. U.S. futures rose, with the S&P 500 and Dow Jones Industrial Average gaining 0.5%. In Asia, the reaction was even stronger. Tokyo’s Nikkei 225 rose 1%, Hong Kong’s Hang Seng jumped 1.7%, and South Korea’s Kospi shot up 2.3%.
Oil Prices Drop as War Fears Cool
The ceasefire talk also hit oil prices. Over the weekend, crude had spiked more than 6% on fears of a broader war. But by Tuesday, those worries faded. U.S. benchmark crude fell 7.2% Monday and dropped another 2.7% Tuesday to $66.67 per barrel. Brent crude also dropped, settling around $69.68.
Markets had feared Iran would block the Strait of Hormuz, a major oil route. That didn’t happen. So traders relaxed.
Wall Street Rises Despite War Drama
Despite the military tension, Wall Street rose again Monday. The S&P 500 climbed 1% to 6,025.17. The Nasdaq gained 0.9% to 19,630.97. Tesla led the rally, jumping 8.2% after launching a test run of self-driving cabs in Austin, Texas. Elon Musk had been hyping it for years. Investors finally saw it happen.
Meanwhile, Hims & Hers Health crashed 34.6%. The reason? Novo Nordisk backed out of selling its Wegovy weight-loss drug through the company. Novo’s U.S. stock also dropped 5.5%.
Fed Rate Cut Hopes Boost Sentiment
On the policy front, Treasury yields eased. A top Fed official said she’d support a rate cut soon if inflation stays under control. The 10-year Treasury yield dipped to 4.33%. The two-year dropped to 3.84%.
Investors are now watching Fed Chair Jerome Powell’s testimony to Congress. Rate cuts could give stocks more room to grow—but only if inflation doesn’t spike.
And with oil prices falling, the inflation scare is easing.
