US-Iran Ceasefire Sparks Global Risk Rally Amid Diplomatic Friction

Global financial markets reacted positively following the announcement of a temporary ceasefire between the United States and Iran. The agreement, brokered by Pakistan, suspends U.S. attacks on Iranian infrastructure for a period of two weeks, providing a momentary reprieve from the threat of a wider regional conflict. The truce follows weeks of intense escalation after U.S. and Israeli strikes against Iran began on February 28. While the ceasefire has stabilized risk assets, market analysts warn that the agreement is fragile, citing a profound lack of trust between Washington and Tehran that could complicate any path toward a lasting peace. Iranian officials indicated that the temporary truce may allow for safe passage through the strategically vital Strait of Hormuz, though they noted that this remains subject to technical limitations and coordination with their armed forces. Meanwhile, Israel has backed the U.S. ceasefire but explicitly stated that the agreement does not cover ongoing operations against Iran-backed Hezbollah in Lebanon. Diplomatic tensions remain high within the West. Spanish Prime Minister Pedro Sánchez emerged as a leading critic of the U.S. strategy, stating that Spain would not applaud those who 'set the world on fire' simply because they later provided a solution. Spain had previously restricted U.S. military access to its bases and closed its airspace to aircraft involved in the strikes, prompting President Trump to threaten the severance of trade ties with the country. European Commission President Ursula von der Leyen and EU foreign policy chief Kaja Kallas both welcomed the de-escalation as a critical step back from the brink. Further diplomatic efforts to explore a comprehensive end to the crisis are scheduled to take place in Islamabad this Friday.