09/04/2026
The United States and Iran reached a two-week ceasefire agreement, which directly triggered significant changes in global financial markets, pushing oil prices to plummet and stock markets to rise, with market risk appetite rebounding significantly.
Stimulated by the ceasefire agreement, market risk appetite continued to recover, with the S&P 500 Index rising 2.5%. U.S. crude oil prices closed below $95 per barrel, a trend that effectively eased market concerns about a global energy crisis and boosted expectations that the Federal Reserve will implement interest rate cuts in 2026. At the same time, U.S. Treasury bond prices fluctuated. As safe-haven demand weakened, the U.S. dollar exchange rate fell sharply, erasing all its gains so far this year; Bitcoin prices took the opportunity to break through the $71,000 mark.
Market sentiment indicators also showed obvious changes. The VIX Volatility Index, widely recognized on Wall Street as the “fear index,” has fallen to pre-war levels, reflecting a significant easing of market panic. Airline stocks, which had been hit hard by soaring fuel prices, rebounded sharply, and emerging market stocks even recorded their largest single-day gain since the outbreak of the epidemic.
It is reported that the ceasefire agreement officially took effect about 90 minutes before the deadline set by President Trump, which required Iran to agree to a ceasefire and reopen the Strait of Hormuz. Although there are reports that regional hostilities are still ongoing, this agreement has effectively eased market concerns about a global economic crisis.
The White House has announced that U.S. Vice President Vance will lead a delegation to visit Pakistan later this week, where he will hold talks with Iran on reaching a lasting peace agreement. In addition, reports indicate that oil tanker traffic in the Strait of Hormuz was temporarily interrupted due to Israel’s attack on Lebanon, but this episode did not have a significant impact on market trends.
Industry insiders have expressed their views on the current market trends. Razakzada said that investors generally believe that oil prices are expected to fall further and the Strait of Hormuz will gradually reopen. Mark Hackett of Nationwide Insurance warned that the ceasefire is undoubtedly a positive signal, but it is not the final solution to the US-Iran issue. “What is most striking is that once the pressure eases, the market reverses rapidly. When positions are so concentrated, just a little sign of change can trigger a reversal.”
Emmanuel Cau of Barclays Bank said that the current stock market is prone to a “strong short squeeze” (a sharp rise in stock prices that forces previously short-selling investors to cover their positions, further accelerating the upward trend). Currently, hedge funds are gradually canceling various protective measures set to resist war risks. Data from Goldman Sachs’ trading department also shows that hedge funds are scrambling to cover their short positions in the U.S. stock market at the fastest pace since the market rebound after the stock market crash triggered by the epidemic in March 2020.
From an economic perspective, the minutes of the Federal Reserve’s March policy meeting show that most officials are worried that the prolonged regional conflict will damage the job market and believe that it is necessary to cut interest rates; at the same time, many policymakers have also emphasized the current inflation risks, highlighting the complexity of the Federal Reserve’s future monetary policy formulation.
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