US and Iran Reach Two-Week Ceasefire, Boosting Equities and Pressuring Oil

US equity futures trended higher on Wednesday following reports that the United States and Iran have entered into a two-week ceasefire agreement. The move signals a temporary pause in hostilities, providing a reprieve for global markets that had been pricing in heightened geopolitical risk. The agreement comes at a critical juncture for energy markets, where tensions in the Middle East have historically driven volatility and price spikes in crude oil. By reducing the immediate threat of conflict, the ceasefire has triggered a sell-off in energy commodities as the 'war premium' is stripped from prices. Oil prices declined pre-bell as traders unwound long positions tied to supply disruption fears. Conversely, the shift toward stability bolstered investor confidence in equities, with futures indicating a positive open for major US indices as risk-on sentiment returns. While the ceasefire is limited to a fourteen-day window, market participants are viewing this as a potential opening for broader diplomatic negotiations. Traders will be closely monitoring the adherence to the agreement to determine if this trend of de-escalation will persist beyond the two-week period.