Global Markets Rally as Strait of Hormuz Reopening Cools Oil

The breakthrough follows a U.S.-Iran agreement to extend a ceasefire by 60 days, permitting the resumption of maritime traffic through the critical shipping lane. While President Donald Trump warned he would resume hostilities if commitments are breached, the immediate cooling of energy markets has shifted investor sentiment. Wall Street indexes gained ground, with the S&P 500 climbing 1.00% to 7,494.43, as traders weighed the prospect of lower inflation against the Federal Reserve's recent hawkish signals under Chair Kevin Warsh.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, noted that while the current market move looks like a bounce rather than a fundamental shift, lower energy prices provide critical relief for consumers and businesses alike. Despite this, skepticism remains regarding the longevity of the diplomatic truce. European markets saw a mixed reaction; the STOXX 600 dipped 0.31% as the weight of energy sector losses offset the broader benefits of cheaper fuel. Meanwhile, the U.S. dollar rose 0.21% against a basket of currencies, and yields on 10-year Treasury notes retreated to 4.432%, reflecting a market caught between cooling inflation expectations and lingering geopolitical uncertainty.