Oil prices fall and stocks rise after US-Iran ceasefire deal

Oil prices dropped sharply and global stock markets rallied after the United States and Iran agreed to a ceasefire. The deal includes a key provision to reopen the Strait of Hormuz, a critical waterway for global oil shipments that had been disrupted during the recent conflict.

Financial markets reacted immediately. The ceasefire revived some investor bets that the US Federal Reserve might cut interest rates, as the reduced geopolitical risk could ease inflation pressures. However, shipping giant Maersk expressed caution, stating it was not immediately resuming normal operations in the Strait of Hormuz despite the agreement.

In Iran, officials stated that the Bushehr nuclear power plant was safely producing electricity despite having been attacked during the hostilities. The overall market shift saw hedge funds, which had been caught in the turmoil, record some of their worst losses since the COVID-19 pandemic.