Oil prices plunged the most in nearly six years and stock markets surged across the globe after the US and Iran agreed to a two-week ceasefire on Tuesday night — less than two hours before a deadline set by President Trump to destroy Iranian infrastructure.
West Texas Intermediate crude tumbled as much as 19% to under $93 per barrel after the announcement, while Brent fell as much as 16%.
Dow futures jumped over 1,000 points on Tuesday night, with S&P 500 futures climbing more than 2.1% and Nasdaq 100 futures rising 2.3%. European stock futures surged 5%, while in Asia, South Korea’s Kospi led gains with a 5.8% jump.
The Deal
Trump posted on Truth Social on Tuesday evening that he had agreed to suspend attacks on Iran for two weeks, following conversations with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir — who had requested that Trump “hold off the destructive force being sent tonight to Iran.”
The ceasefire is contingent on Iran agreeing to what Trump called a “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz,” the waterway through which roughly one-fifth of the world’s oil and gas passes.
Tehran effectively closed the strait after the US and Israel attacked Iran in late February.
Trump said the US had received a 10-point proposal from Iran, which he described as “a workable basis on which to negotiate,” adding that “almost all of the various points of past contention have been agreed to.”
Iran’s Foreign Minister Seyed Abbas Araghchi issued a formal statement declaring that if attacks against Iran are halted, its armed forces “will cease their defensive operations.”
He added that “for a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations.”
The two sides will now negotiate over the coming two weeks in an attempt to reach a permanent settlement.
EV Stocks Rebound
Despite the rising cost of fuel being broadly seen as a tailwind for electric vehicle adoption, the geopolitical tensions of the past five weeks have pressured the entire equity and cryptocurrency markets — including EV stocks.
Tesla shares extended declines on Tuesday to as low as $337, representing a 32% drop from the all-time high of $498.83 reached in late December.
The slide came a day after JPMorgan reiterated a $145 price target on the stock, warning of 60% downside risk.
As of 4:30 a.m. ET on Wednesday, Tesla was surging more than 5% in pre-market trading.
The Detroit automakers Ford and GM saw their shares climb about 4% each.
Shares of Lucid Motors reached a new all-time low on Tuesday, with its market capitalisation dropping below $3 billion.
The Saudi-backed EV maker was up 4.6% to $9.24 as of press time.
Rivian recovered Tuesday losses of nearly 4%, climbing 4.3% in Wednesday’s pre-market session.
The company, founded and led by RJ Scaringe, is expected to announce the start of R2 production at its Illinois plant imminently.
Both premium EV brands went public in 2021 and hit record highs within months, reaching market capitalisations they have never approached since.
US-listed Chinese EV makers also rose in early Wednesday trading. Nio and XPeng both gained more than 4%, while Li Auto traded 2% higher at $18.79.
Trump’s Full Statement
“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!
The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East.
We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated.
On behalf of the United States of America, as President, and also representing the Countries of the Middle East, it is an Honor to have this Longterm problem close to resolution.
Thank you for your attention to this matter! President DONALD J. TRUMP”
