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Ceasefire · Geopolitics · Oil Prices · Stock Market
A fragile two-week ceasefire between the United States and Iran took effect on April 8, causing global stock markets to surge, with the S&P 500 soaring 2.5% and U.S. crude oil prices plunging over 16% below $95 per barrel, as hopes for renewed oil shipments through the Strait of Hormuz eased market fears.
The Dow Jones Industrial Average jumped 1,325 points, and the Nasdaq composite rallied 2.8% after President Donald Trump announced the temporary ceasefire. This drop reversed some increases from five weeks of conflict that had pushed oil prices above $119 per barrel.
Iran’s foreign minister stated that oil tankers would be allowed to pass for the next two weeks under Iranian military supervision. Airline and travel stocks rebounded strongly, with United Airlines up 7.9% and Carnival cruise lines climbing 9.6%.
Delta Air Lines reported better-than-expected quarterly results. Global markets also reacted positively, with Asia’s Nikkei 225 and Kospi indexes soaring over 5%, and Germany’s DAX and France’s CAC 40 rising over 4% each.
Despite initial optimism, analysts urged caution due to continued attacks in Iran, Israel, and Lebanon, and the market's upbeat response faded later in the day. Treasury yields fell, with the 10-year note slipping to 4.29% from 4.33%, reflecting hopes that lower oil prices could allow the Federal Reserve to resume interest rate cuts later in the year.
