Global markets reacted optimistically to a two-week truce announcement between the United States and Iran, boosting stocks and bonds while oil prices plunged. President Donald Trump confirmed a regime change in Iran and talks on sanctions relief. In Argentina, the country risk index dropped below 570 basis points.
A two-week truce between the United States and Iran was announced just 90 minutes before President Donald Trump's deadline for Tehran to accept the ceasefire and reopen the Strait of Hormuz. Trump posted on social media that Iran has undergone a “regime change” and that the United States will discuss sanctions relief with the Islamic republic. “No uranium enrichment,” he stated.
Optimism drove market gains: the S&P 500 rose 2.6%, Nasdaq 100 climbed 3.3%, and Dow Jones gained 2.9% mid-morning in New York. In Europe, the Stoxx 600 advanced 4.2%, while the MSCI World index rose 3%. Bitcoin surpassed US$72,000, up 4.4% to US$72,359.57.
West Texas Intermediate crude fell 17% to US$93.25 per barrel, its biggest drop in six years, easing inflation fears. The Wall Street fear gauge VIX dropped to pre-war levels, and airlines surged. The dollar retreated 1% against major currencies.
In Argentina, JP Morgan's country risk index closed at 570 basis points, down from above 650 last week. Local stocks rebounded up to 5% and ADRs up to 7%, mirroring global relief. Chris Senyek of Wolfe Research said it lays the groundwork for short-term peace in the Middle East.
