Trump Announces Full Ceasefire Between Israel and Iran as Global Markets React Sharply

On Tuesday during early Asian trading hours, U.S. President Donald Trump announced that Israel and Iran had reached a full agreement to implement a comprehensive ceasefire, significantly easing global risk sentiment. According to Trump’s post on Truth Social, the ceasefire includes two 12-hour phases: Iran would begin the initial 12-hour pause, followed by Israel. After 24 hours, the war—lasting 12 days—would be officially declared over. Trump noted that both sides would maintain peace and mutual respect during the ceasefire periods. Iranian senior officials confirmed that Tehran had accepted the U.S.-proposed ceasefire, which was mediated by Qatar.

Reports from Iranian media indicated powerful explosions in Tehran and other cities around the same time as the ceasefire announcement. Iranian Foreign Minister Abbas Araghchi emphasized that while Tehran does not seek escalation, it is prepared to respond to any further U.S. aggression. U.S. Vice President Vance stated that President Trump had spent all of Monday making repeated calls to secure the agreement and noted that the U.S. airstrikes over the weekend had met their strategic goals. He added that Iran’s enriched uranium stockpile had been “buried” and warned that any future attempt by Iran to develop nuclear weapons would face a “very, very powerful U.S. military.”

Market reactions were immediate. WTI crude oil opened higher but quickly reversed course, plunging 3% and falling below USD 65 per barrel. Overnight, international oil prices had already declined by 9%. Spot gold dipped below USD 3,360 per ounce, registering a 0.26% daily loss. Meanwhile, Bitcoin rose above USD 106,000 per coin, up 4.99% intraday. U.S. stock index futures extended gains, with S&P 500 futures rising 0.5% and Nasdaq futures climbing 0.6%.

Broader global markets also responded to the easing geopolitical tensions. European equities opened higher, with the Stoxx 50 index futures rising 1.5%. In Asia, the Nikkei 225 closed up 1.1% at 38,790.56 points, the TOPIX gained 0.7% to 2,781.35, and South Korea’s KOSPI surged 3%, marking its largest single-day gain since April 10. The MSCI Asia Pacific Index was on track for its strongest daily performance in over two months.

Earlier, WTI and Brent crude had each dropped over 5% in response to initial reports of the ceasefire, while Brent’s decline widened to 4.8%. The Israeli Defense Minister had ordered a strong response to Iranian missile launches, and Israeli forces reported detecting new Iranian ballistic missile activity, indicating potential incoming alerts in northern Israel.

Chris Weston of Pepperstone Group Ltd noted that traders now believe the risk of a supply shock has fully dissipated and that the likelihood of prolonged U.S. involvement in the conflict has been priced out. Tom Kinoshita of Invesco added that although short-term uncertainty has eased following Trump’s ceasefire announcement, market participants remain cautious about whether this temporary truce could lead to a permanent cessation of hostilities.

In the currency markets, risk-sensitive G10 currencies such as the New Zealand dollar and Australian dollar led gains, followed by the yen. Sean Callow of InTouch Capital Markets remarked that the dollar, which had previously benefited from the conflict, was now retreating as investors sought to distance themselves from fears over Iran’s trajectory.

Meanwhile, the Federal Reserve’s policy direction regained attention. Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman indicated that if inflation comes under control, they may support a rate cut in July. IG Australia's Tony Sycamore suggested that with Fed Chair Powell's testimony approaching and internal divisions within the board growing, market focus may soon pivot back to monetary policy and tariff developments.

Despite the temporary relief in markets, some analysts and geopolitical observers remain skeptical. Former U.S. Deputy National Intelligence Officer for Near East Affairs Jonathan Panikoff noted that Iran’s advance notice of its retaliatory action indicated a desire to de-escalate tensions while maintaining domestic credibility through a show of force. Trump, in earlier remarks, thanked Iran for the warning and called on both nations to pursue peace and harmony.

Before the recent military escalation, U.S. and Iranian negotiators had held several rounds of talks aimed at forging a new agreement to limit Iran’s nuclear capabilities, following Trump’s withdrawal from the 2015 deal during his first term. In recent weeks, Trump has alternated between military pressure and diplomatic overtures.

Even as Trump declared the ceasefire, geopolitical tensions remained high. Israel reportedly targeted Iranian sites including airports, IRGC security headquarters, and the Fordow nuclear facility, while Iran responded with missile strikes. Tehran reiterated that it would not resume negotiations under attack. As market participants digest the evolving situation, the short-term stabilization has led to notable shifts across commodities, equities, and currency markets. Yet whether this ceasefire marks the beginning of lasting peace remains uncertain.