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U.S. equity futures climbed, and the dollar showed signs of instability on Wednesday following President Donald Trump’s decision to indefinitely extend a ceasefire with Iran.
The announcement, which aims to preserve a fragile truce established two weeks ago, provided a boost to investor confidence, driving S&P 500 futures up by 0.5% and Nasdaq futures by 0.6%.
While the move appeared unilateral, markets reacted positively to the reduced likelihood of immediate escalation, even as geopolitical tensions remain a backdrop for global trade.
Global markets have largely recovered from a volatile March, with many indexes returning to levels seen before the conflict.
Market analysts noted that the “peak uncertainty” regarding the war may have passed, leading traders to favour riskier assets like stocks.
However, the currency market remained cautious; the dollar wavered as investors weighed the impact of the extended truce against the continued closure of the Strait of Hormuz, which keeps energy supply lines restricted.
Despite the optimistic tone in equities, the energy sector held firm with oil prices maintaining recent gains. U.S. West Texas Intermediate crude rose to $90.12 a barrel, reflecting the reality that a permanent end to the conflict has yet to be reached.
With the U.S. Navy maintaining its blockade and the status of the Strait of Hormuz unchanged, investors are keeping a close watch on whether Iran and Israel will formally join the extension or if further diplomatic breakthroughs are on the horizon.
