By Ginika Igboke
U.S. crude oil prices fell sharply below $100 per barrel, while stock futures surged after President Donald Trump conditionally agreed to suspend military action against Iran for two weeks, provided safe passage is restored through the Strait of Hormuz.
West Texas Intermediate (WTI), the U.S. benchmark for crude, dropped nearly 16 percent to around $95 per barrel on the New York Mercantile Exchange. Prices had earlier plunged as much as 19 percent before recovering slightly.
Trump said the temporary ceasefire depends on Iran ensuring the safe and immediate reopening of the Strait of Hormuz, a critical route for global oil and natural gas shipments.
“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir of Pakistan, and their request to hold off the planned strike on Iran, and subject to Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz, I have agreed to suspend military action for a period of two weeks,” Trump said in a social media post issued shortly before his 8 p.m. EST deadline.
Iranian Foreign Minister Seyed Abbas Araghchi confirmed Tehran’s acceptance of the temporary pause.
“If attacks against Iran are halted, our armed forces will cease defensive operations,” he said. “For a period of two weeks, safe passage through the Strait of Hormuz will be possible, coordinated with Iran’s armed forces and subject to technical considerations.”
Markets React to De-escalation
Equity markets responded positively to the easing of tensions. In after-hours trading, major U.S. indexes posted strong gains.
The Dow Jones Industrial Average jumped as much as 1,000 points, the Nasdaq Composite surged nearly 700 points, and the S&P 500 rose by more than 100 points.
Earlier in the day, however, markets had been volatile amid uncertainty over whether Washington and Tehran would reach an agreement. By the close of regular trading, movements were modest, with the Dow slipping 0.2 percent, the S&P 500 edging up 0.1 percent, and the Nasdaq gaining 0.1 percent.
What Lies Ahead
Despite the relief rally, analysts caution that uncertainty remains. The Strait of Hormuz continues to be a central factor for global energy markets, handling roughly 20 million barrels of oil and petroleum products daily.
Market watchers say energy security will remain a key concern in the months ahead, particularly following recent disruptions. Demand may increasingly shift toward more stable suppliers.
Heating oil futures also dropped significantly, falling 17 percent to below $3.72 per gallon.
However, consumers may not see immediate relief at the pump due to the “rockets and feathers” effect—where fuel prices rise quickly with crude oil increases but decline more slowly when crude prices fall, as retailers adjust to existing inventory costs.
As of April 7, the national average price for gasoline remains above $4 per gallon.
Analysts warn that if oil prices were to surge significantly again—particularly toward extreme levels—it could heighten the risk of a global economic slowdown or recession.
Gold, Bitcoin, and the Dollar
Other asset classes also reacted to the de-escalation.
Gold and silver futures rose by 4 percent and 6 percent, respectively, while Bitcoin gained 3 percent to approach $72,000.
Meanwhile, long-term U.S. Treasury yields eased. The benchmark 10-year yield fell to 4.27 percent, with 20- and 30-year yields hovering around 4.85 percent.
The U.S. dollar weakened as its safe-haven appeal diminished. The U.S. Dollar Index, which tracks the currency against a basket of major peers, declined by about 0.9 percent after having strengthened during the weeks of heightened geopolitical tension.