U.S. and Iran Agree to Two-Week Ceasefire Amid Uncertainty Over Strait of Hormuz Reopening

President Donald Trump announced a two-week ceasefire between the United States and Iran on Wednesday, suspending planned attacks on Iranian infrastructure. U.S. and Israeli strikes on Iran on February 28.

Official statements from Washington and Tehran confirmed the pause but provided limited details on implementation. The Strait of Hormuz, through which over 20% of the world's oil supply transits daily, has been a focal point of the conflict. Prior to the war, the waterway off Iran's southern coast handled energy products destined for global markets.

The ceasefire aims to normalize shipping traffic, though questions persist about future operations.

stock markets opened higher following the announcement. m.

ET. 7% for Russell 2000. International markets also rallied. 5%, and Germany's DAX jumped more than 5%. Indexes in France, Italy, and the United Kingdom rose over 3%.

U.S. Treasury yields declined across maturities. 4% weeks earlier.

crude oil prices dropped 18% to around $92 per barrel in morning trading, marking the largest one-day percentage decline since 2020 if sustained. Brent crude fell 16% to about $90 per barrel. Analysts at ING noted that further price movements depend on whether negotiations lead to a durable agreement and sustained flows through the strait, with volatility expected during talks later in the week.

16 as of Wednesday morning, according to GasBuddy data. Jet fuel costs have nearly doubled since February 28, per Argus data. Delta Air Lines reported expecting an additional $2 billion in jet fuel spending for the current quarter compared to prior plans.

The airline stated it would reduce growth plans to address rising costs. Exxon Mobil indicated that 6% of its global output was lost due to the war, with two liquefied natural gas facilities impacted by attacks; repairs may take a prolonged period.