Global markets reacted positively following President Trump’s announcement of a “complete and total” ceasefire between Israel and Iran, signaling an end to the 12-day conflict. The U.S. dollar weakened modestly as investors shifted away from safe-haven assets, while U.S. and Asian equity futures climbed on hopes of de-escalation. Oil prices dropped sharply. Brent crude declined nearly 4% to $68.79 per barrel, shedding the geopolitical risk premium that had elevated prices amid the heightened tensions. Analysts note the true test will be whether the ceasefire holds sustainably, given unresolved issues such as Iran’s uranium stockpiles, which could derail market sentiment if the truce fails.

Despite the drop, Goldman Sachs cautioned that threats to the Strait of Hormuz remain a significant risk: any disruption to oil flows could still drive Brent toward $110 per barrel before moderating in late 2025. Current prices near $69–70 per barrel remain supported more by geopolitical relief than by broad fundamental market strength.

Currency markets reflected this shift in sentiment. The dollar’s decline helped boost Asian equity sentiment: Nikkei futures rose, and regional shares gained modestly. However, the dollar remains sensitive to Fed policy rhetoric, as Chair Powell prepares for Congressional testimony later this week. Notably, some Fed officials have adopted a more dovish tone, increasing speculation that rate-cut discussions may resume if inflation continues to ease.

Across markets, the relief rally underscores how quickly sentiment can pivot on geopolitical headlines and central bank communication. While this ceasefire offers short-term respite, vulnerabilities, such as Iran’s nuclear ambitions and the fragile nature of peace agreements, could still unsettle markets. Investors are now closely parsing Powell’s remarks and watching for any signs that the ceasefire could unravel or sustain.

References:

• Reuters. (2025, June 23). Investors react to news of Iran‑Israel ceasefire. https://www.reuters.com/world/africa/view-investors-react-after-trump-announced-ceasefire-between-iran-israel-2025-06-23/

• Reuters. (2025, June 23). Oil prices fall to over one‑week lows as Trump announces Israel‑Iran ceasefire. https://www.reuters.com/business/energy/us-crude-oil-futures-fall-over-3-trump-announces-israel-iran-ceasefire-2025-06-23/

• Reuters. (2025, June 23). Goldman Sachs warns of oil price surge on Strait of Hormuz risks. https://www.reuters.com/business/energy/goldman-sachs-warns-rising-risks-energy-supply-sees-potential-surge-oil-prices-2025-06-23/

• Reuters. (2025, June 23). Trading day: All aboard the ‘risk on’ rollercoaster. https://www.reuters.com/business/aerospace-defense/global-markets-trading-day-graphic-pix-2025-06-23/