U.S. Stock Futures Surge as U.S.-Iran Ceasefire Eases Oil Supply Fears

Ceasefire Agreement Triggers Global Market Repricing

By 03:19 ET (07:19 GMT), Dow futures had risen by 1,076 points, or 2.3%, S&P 500 futures were up 168 points, or 2.5%, and Nasdaq 100 futures had climbed 799 points, or 3.3%. This followed a mostly subdued prior session on Wall Street, when traders were focused on a U.S. deadline for Iran to reopen the Strait of Hormuz or face major military action, a deadline that was ultimately averted.

The ceasefire was reached at the “11th hour” and mediated by Pakistan. In a social media post, U.S. President Donald Trump said the agreement followed conversations with Pakistani leaders, after Pakistan called on him to withdraw the Tuesday 8 p.m. Eastern time ultimatum. Trump agreed to suspend an attack on Iran for two weeks.

Iran’s foreign minister, Abbas Araghchi, stated that Tehran would “cease their defensive operation” and enable “safe passage” through the Strait of Hormuz if shipping is coordinated with the Iranian military. Pakistani Prime Minister Shehbaz Sharif invited U.S. and Iranian officials to Islamabad for talks on Friday. Israel, which joined the U.S. in launching an assault on Iran in late February, backed Trump’s decision, according to a statement from Prime Minister Benjamin Netanyahu’s office.

Energy, Safe-Haven Assets, and Policy Expectations React

Oil prices fell sharply following the announcement, although they remained above pre-war levels. By 03:44 ET (07:44 GMT), Brent crude futures were down more than 13% at $94.85 per barrel, while U.S. West Texas Intermediate futures dropped 14.8% to $96.23 per barrel.

Gold prices advanced to an almost three-week high on Wednesday, supported by a weaker dollar and a reassessment of near-term risks. Spot gold was up 2.4% at $4,818.63 an ounce.

U.S. government bonds also rallied as markets revived bets that Federal Reserve interest rate cuts could be considered again later this year. Earlier, expectations for rate reductions in 2026 had largely been removed on concerns that a war-driven energy shock would intensify inflation.

Analysts at Vital Knowledge wrote that equities which had gained from the conflict, including energy firms, commodity chemicals producers, and defense contractors, “will probably suffer aggressive profit taking” following the ceasefire. They added that consumer discretionary stocks “should see the biggest rally.”

Separately, Shell cut its first-quarter gas production outlook and warned of ongoing uncertainty linked to the conflict.

FAQ

What caused U.S. stock futures to rise?
U.S. stock futures rose after the U.S. and Iran agreed to a temporary ceasefire and Iran pledged to allow safe tanker passage through the Strait of Hormuz, easing fears of an extended energy supply disruption.

How did oil prices react to the ceasefire?
Brent crude futures fell by more than 13% to $94.85 per barrel, and U.S. West Texas Intermediate futures declined 14.8% to $96.23 per barrel, moving back below $100 but remaining above pre-war levels.

What was the market impact on gold and bonds?
Gold prices climbed 2.4% to $4,818.63 an ounce, nearing a three-week high, while U.S. government bonds rallied as investors renewed expectations that Federal Reserve rate cuts may be possible later this year.

Which sectors are expected to be most affected in equity markets?
According to analysts at Vital Knowledge, energy, commodity chemicals, and defense stocks that benefited from the conflict may see profit taking, while consumer discretionary stocks are expected to experience the strongest rally.