Oil prices fall, stock markets rise amid Trump's announcement of a truce between Israel and Iran

West Texas Intermediate crude prices fell as much as 6% in Asian trading following President Donald Trump's surprise announcement of a tentative cease-fire agreement between Israel and Iran. US stock index futures, on the contrary, showed growth amid hopes for a reduction in tensions in the Middle East.

The message about the truce was published by Trump on the Truth Social platform. It followed Iran's missile strikes on a US military base in Qatar, which, according to analysts, were more symbolic in nature. These developments supported the growth of the S&P 500 index, which added 1% on Monday, and oil prices fell below the $70 per barrel mark.

On Tuesday, S&P 500 futures were up 0.5%. Japanese and Australian stock indexes also opened higher. The US dollar weakened against all G10 currencies, while US Treasury bond futures declined.

Chris Weston, head of research at Pepperstone Group Ltd., noted that the market overestimated the risks of a prolonged military campaign involving the United States, which gave investors reason to increase the share of risky assets. According to him, the economy, inflation, tariff policy and promotion of a new legislative package are once again becoming a priority for the markets.

According to the White House, a preliminary truce agreement between Israel and Iran was reached by mutual consent of the parties. Official comments from the authorities of Iran and Israel have not yet been received. Earlier, Trump described the Iranian attack as "very weak" and predictable. Iran has fired missiles at a US base in Qatar in response to strikes by US forces on three Iranian nuclear facilities. Qatari authorities said the missiles were intercepted and base personnel evacuated.

In Asian markets, geopolitical tensions remained in the spotlight. China has announced tighter controls on two chemicals used to make fentanyl, in what was seen as a gesture to the United States as part of the ongoing trade truce. At the same time, Beijing criticized the strikes on Iranian nuclear facilities and expressed its readiness to participate in international efforts to stabilize the situation in the Middle East.

Oil supplies from the region, which accounts for a third of global production, continue uninterrupted, including through the Strait of Hormuz. Shipments of Iranian oil from the Persian Gulf are even estimated to have increased since the Israeli attacks began.

In the foreign exchange market, the Bloomberg Dollar Spot index fell 0.2%. The Australian and New Zealand dollars strengthened by about 0.3%. Analysts note that the US dollar has lost ground, which previously strengthened against the background of the conflict. According to Sean Callow, senior analyst at InTouch Capital Markets, investors are looking to focus on the prospects for stabilization, pushing aside short-term risks.

Analysts at Morgan Stanley pointed out that historically, sell-offs caused by geopolitical events are usually short-term. According to the bank, the S&P 500 index on average shows growth of 2% in a month, 3% in three months and 9% in a year after such events. Future dynamics, according to strategists, will largely depend on oil prices.

Investors are also waiting for signals about the Fed's policy. Federal Reserve Chairman Jerome Powell will address Congress this week, where he will explain the regulator's position on the timing of a possible rate cut in 2025. According to forecasts, the Fed will keep its key rate unchanged until at least September.

Key market indicators

Stocks
- S&P 500 Futures +0.5%
- Hang Seng Futures +0.3%
- Topix (Japan) +1%
- S&P/ASX 200 (Australia) +0.7%
- Euro Stoxx 50 unchanged

Currencies
— Bloomberg Dollar Spot −0,2%
- Euro +0.2% to $ 1,1600
- Yen +0.2% to 145.84 per dollar
- Yuan on the offshore market unchanged (7.1753 per dollar)

Cryptocurrencies
- Bitcoin +1.5% to $ 105,395.48
- Ether +2.7% to $ 2,412. 78

Bonds
— US 10-year Treasury Bond yield of 4.35%
-10-year Japanese government bond yield +1bp to 1.415%
- Australian 10-year bond yield -2 bps to 4.19%

Raw material
— WTI crude -4.4% to $ 65.51 a barrel
- Gold -0.9% to $3,338. 93 an ounce