Global Markets Rally as US-Iran Ceasefire Signals Reopening of Strait of Hormuz

US stock indices saw a massive rebound on Wednesday as a temporary ceasefire between the US and Iran triggered a relief rally across global markets. The Dow Jones Industrial Average climbed 1,204 points, or 2.6%, while the S&P 500 and Nasdaq Composite rose 2.4% and 2.9%, respectively, in midday trading. The rally follows an announcement by President Trump regarding a deal contingent on the reopening of the Strait of Hormuz. For over five weeks, markets had been positioned defensively, pricing in worst-case scenarios regarding energy supplies and potential disruptions to approximately one-fifth of the global oil supply. Energy markets reacted sharply, with Brent and West Texas Intermediate (WTI) crude falling below $100 per barrel, eventually trading around $95. This decline comes after economists warned that a prolonged closure of the Strait could have pushed US gasoline prices beyond $5 per gallon. Despite the initial surge, analysts remain cautious. The ceasefire is limited to a two-week window, and reports of continued Israeli strikes in Lebanon have led to warnings from Tehran that it could withdraw from the agreement. While maritime monitoring services reported early signs of vessel movement, some analysts question the appetite of tanker operators to return to the waterway without a longer-term guarantee of stability.