Global markets sharply changed course on Monday after U.S. President Donald Trump announced that he had ordered the military to postpone any strikes on Iran’s energy infrastructure. The decision helped ease fears of a major oil shock and reduced uncertainty across financial markets.
The reaction was immediate: Brent crude futures fell sharply, the dollar weakened against major currencies, and stock markets rebounded, while government borrowing costs declined.
According to Fiona Cincotta, senior market analyst at City Index, the announcement allowed investors to downgrade their worst-case scenarios. She highlighted the potential reopening of the Strait of Hormuz, a key factor quickly priced into the markets.
However, optimism remains cautious. Iranian media, including the Tasnim news agency, contradicted Trump’s statements, asserting that no negotiations with the U.S. were underway and that the Strait of Hormuz would not return to pre-crisis conditions. These reports tempered investor enthusiasm.
Despite these mixed signals, markets largely maintained a positive trend. Brent crude was down about 7% at roughly $103 per barrel, after plunging to $96 earlier in the session. It had reached $119 just a few days earlier.
On the bond markets, yields retreated after initial increases, amid a revision of expectations for interest rate hikes in Europe. Investors notably reduced their forecasts for the Bank of England and European Central Bank.
In the United States, Treasury yields also fell, with the 10-year rate returning to 4.37%. Meanwhile, the dollar trended lower, and the euro rose slightly.
For Elias Haddad, market strategist at Brown Brothers Harriman, the moves reflect an immediate reaction to positive news. He cautions, however, that a sustained rally will depend on a genuine de-escalation rather than a temporary pause in tensions.
