World markets react to Israel-Iran ceasefire as oil prices fall

While global stocks rose on Tuesday in response to the ceasefire between Iran and Israel, oil prices fell to near two-week lows as concerns about supply disruptions eased. The ceasefire brings an end to the 12-day war, which recently culminated in a US attack on Iranian nuclear facilities over the weekend.

Market movements followed US President Donald Trump’s announcement late on Monday that Iran and Israel had agreed to a ceasefire. A few hours later, Trump said the ceasefire was now in effect and urged both countries not to violate it.

Oil prices fell by more than 3%, after plunging 9% on Monday when Iran carried out a symbolic retaliation against a US base in Qatar.

With the immediate threat to the vital shipping route through the Strait of Hormuz apparently averted, US crude futures fell a further 3.7% to USD 65.96 a barrel, their lowest level since 11 June, before Israeli strikes on Iran began.

“With markets now viewing the risk of escalation as having passed, attention is likely to shift to the tariff deadline in two weeks,” said Prashant Newnaha, chief rates strategist for TD Securities in Asia-Pacific.

Risk assets rose, with S&P 500 futures up 0.6% and Nasdaq futures up 0.9%. EUROSTOXX 50 futures jumped 1.5% and FTSE futures rose 0.4%.

The MSCI broadest index of Asia-Pacific shares outside Japan jumped 2.2%, while Japan’s Nikkei rose 1.3%.

News agency Reuters also learned that Japan’s chief tariff negotiator is preparing for a seventh visit to the United States, aimed at ending tariffs that are harming the Japanese economy.

Chinese blue-chip stocks rose 1.2%, while Hong Kong’s Hang Seng index also gained, adding 1.8%.