President Trump announces two-week ceasefire with Iran
President Donald Trump announced that the United States had reached a two-week ceasefire with Iran, just hours before a deadline he imposed.
April 8 (Reuters) – U.S. stock index futures rose on Wednesday as investors breathed a sigh of relief after the U.S. and Iran agreed to a two-week cease-fire and oil prices fell on hopes of resuming energy supplies through the Strait of Hormuz.
The announcement came less than two hours before US President Donald Trump’s deadline and was a reversal from previous warnings that Iran would destroy “an entire civilization” if it did not reopen the Strait of Hormuz, a narrow waterway that normally handles about a fifth of the world’s oil trade.
Global assets rose sharply, with stock indexes in Asia and Europe rising 4% to 5%, but oil prices fell 16% to nearly $90 a barrel. The dollar, which has attracted attention as a safe-haven asset over the past month, has fallen 1% against the Japanese yen JPY=.
“Sustaining gains will need to be supported by concrete progress in negotiations. The fundamental question of whether Iran will permanently reopen the Strait of Hormuz and whether a lasting agreement can be reached remains unresolved,” said Josh Gilbert, market analyst at eToro.
“If two weeks pass without a deal, we can expect a sharp and inexorable reversal of this relief rally.”
The ceasefire brought immediate relief to investors after weeks of conflicting signals from Trump and Iran dragged the conflict into two months.
As of 4:05 a.m. ET, the Dow E Mini YMcv1 was up 1,045 points (2.23%), the S&P 500 E Mini EScv1 was up 162.25 points (2.44%), and the Nasdaq 100 E Mini NQcv1 was up 771.25 points (3.16%).
Futures tracking the interest rate-sensitive Russell 2000 index RTYcv1 rose 3.6%, while the CBOE volatility index .VIX fell 5.01 points to 20.77, its lowest in more than two weeks.
U.S. energy stocks fell in premarket trading, tracking global oil prices. Shares of Exxon Mobil XOM.N fell 6.2%, Chevron CVX.N 5.4% and Occidental Petroleum OXY.N 7.8%.
Stocks related to the travel and leisure sector rose slightly. Shares of American Airlines AAL.N and Delta Air Lines DAL.N rose 7.3% and 6.8%, respectively, while cruise lines Carnival CCL.N and Norwegian Cruise Line NCHL.N rose 9.4% and 8.1%, respectively.
Big banks also rose before the bell, with JPMorgan Chase & Co JPM.N , Bank of America BAC.N and Wells Fargo WFC.N each rising more than 2%.
Beyond immediate relief, global investors remain focused on seeing whether a ceasefire leads to a broader solution before making big bets.
Still, concerns persisted that prolonged conflict and rising energy costs could weigh on economic growth and complicate the Federal Reserve’s monetary policy trajectory. In March, the benchmark S&P 500 .SPX posted its biggest monthly decline in a year.
Treasury yields fell on Wednesday, while interest rate futures show investors see a 56% chance of a 25 basis point cut by the end of 2026, according to data compiled by LSEG.
Before the war broke out, traders were betting on at least two 25 basis point rate cuts this year.
Later in the day, investors will parse comments from Fed policymakers Mary Daley and Christopher Waller, as well as minutes from the central bank’s March 17-18 meeting.
(Reporting by Johan M. Cherian and Purvi Agarwal in Bengaluru; Editing by Rashmi Aitch and Shelly Jacob Phillips)
