Trump Calls Off Iran Strikes and Signals Peace Deal, Sparking Global Market Rally
US President Trump announced he cancelled planned military strikes on Iran and said a peace deal is "imminent," triggering broad gains across Wall Street and Asia-Pacific markets and pushing oil prices lower.
What happened
President Trump announced on Thursday that he called off planned US strikes against Iran and declared a peace settlement was reached, 'subject to finalisation of documents.' Iran's Foreign Ministry did not confirm a deal but said a memorandum of understanding is 'under consideration.' The announcement sent the S&P 500 up 1.8%, the Nasdaq up 2.5%, and the Dow up 1.9% — the biggest single-day gain since April. The rally extended into Asia-Pacific on Friday, with South Korea's Kospi surging over 8%, Japan's Nikkei rising up to 4%, Taiwan's TAIEX gaining 2.4%, and Australia's ASX 200 up 1.8%. Brent crude oil fell roughly 1% to below $89.50 a barrel on expectations that the Strait of Hormuz — which carries about one-fifth of global energy supplies in peacetime — could reopen to normal traffic.
Why it matters
A US-Iran deal, if finalised, would reduce one of the most acute geopolitical risks currently affecting global energy markets. The Strait of Hormuz is a critical chokepoint for world oil supply, and any sustained closure or conflict there raises fuel costs for consumers and businesses worldwide. The sharp market gains reflect how heavily investors had priced in conflict risk. A genuine resolution would ease inflationary pressure from energy prices and reduce the threat of a broader regional war.
What could happen next
Analysts at ANZ Bank caution that sustained market gains depend on an actual signed deal and a full reopening of the Strait of Hormuz. Iran has not yet publicly confirmed the terms, and Trump said finalisation of documents is still pending — leaving meaningful uncertainty about whether a durable agreement will materialise.
Context
The Strait of Hormuz, located between Iran and Oman, is the world's most important oil transit route. Roughly 20% of global oil and a significant share of liquefied natural gas passes through it. Iran has historically threatened to close the strait during periods of US-Iran tension, which would cause an immediate spike in global energy prices.