Stock markets around the world are surging higher and crude oil prices are crashing after the U.S. and Israel agreed to a two-week ceasefire with Iran.
Stock markets in Europe and Asia are up as much as 5% on April 8 on news of a pause in fighting in the Middle East.
In the U.S., the blue-chip Dow Jones Industrial Average was up more than 1,200 points in premarket trading, while the technology heavy Nasdaq (NDAQ) was up 850 points or 3.5%.
The benchmark S&P 500 index added 180 points or 2.70% prior to trading starting.
Equities are soaring as crude oil prices crash, with West Texas Intermediate (WTI), the U.S. standard, down 16% to $94.63 U.S. per barrel.
Brent crude oil, the international standard, is down 14% and trading at $93.79 U.S. a barrel.
The reversal for both oil and stocks comes after U.S. President Donald Trump wrote on social media, “I agree to suspend the bombing and attack of Iran for a period of two weeks.”
Trump noted that the “double sided” ceasefire was contingent on Iran agreeing to open the Strait of Hormuz and allow commercial ships and oil tankers to pass through it.
Iran’s government agreed to reopen the waterway for two weeks as long as all attacks are halted, according to a statement from the country’s Foreign Minister.
Israel has also agreed to a ceasefire with Iran, although its government said the halt in fighting doesn’t extend to Lebanon where it also has military operations.
Trump had previously set a deadline of 8 p.m. on April 7 for Iran to reach a deal with the U.S. to reopen the Strait of Hormuz or face destruction.
On social media earlier on April 7, Trump wrote that he would wipe out Iran’s “whole civilization” if a deal wasn’t reached.
The benchmark S&P 500 index is rising after nearing a 10% correction in March of this year.
Crude oil prices are up more than 70% this year because of the closure of the Strait of Hormuz and had risen above $115 U.S. per barrel on April 7.
