Global markets rebounded sharply on Tuesday, with oil prices falling sharply and stock indices nearing record highs, buoyed by hopes that the conflict between Israel and Iran will not disrupt global crude supplies. This easing in the markets comes despite signs that the announced truce could be called into question on the ground.
In New York, the S&P 500 gained 0,7% in morning trading, coming within just 1,2% of its February all-time high, after losing nearly 20% in the spring. The Dow Jones Industrial Average rose 277 points (+0,7%) and the Nasdaq gained 1%, buoyed by falling energy prices and optimism about interest rates.
The largest fluctuations were visible on the oil market, where the barrel of US crude oil fell by 4,5%, to $65,43. Brent, the international benchmark, fell by the same amount, to $67,35. This is a spectacular drop, especially since prices are now lower than those observed before the start of hostilities nearly two weeks ago.
The origin of this decline: the announcement of a ceasefire between Israel and Iran by the president Donald Trump Monday evening. Although the truce was partially violated on Tuesday morning, investors felt that risks to oil production and transportation, particularly through the Strait of Hormuz, had eased.
"As long as the ceasefire holds and a lasting solution is possible, oil prices could continue to fall," said Carsten Fritsch, a commodities analyst at Commerzbank. The gradual resumption of production by the OPEC+ alliance also reinforces this outlook.
The drop in oil prices has also revived expectations of possible monetary easing in the United States. Cheaper oil could reduce inflationary pressures, potentially giving the Federal Reserve room to lower rates. Two Trump-appointed Fed members have suggested that a cut could be considered as early as the next meeting. The president, for his part, continues to call for lower rates to support the economy.
However, Fed Chairman Jerome Powell remains cautious. In a prepared speech to Congress, he reiterated that the central bank should "wait until it has better visibility on the trajectory of the economy" before adjusting its monetary policy. This uncertainty is reflected in the stability of bond yields: the yield on 10-year Treasury notes edged up slightly to 4,35%, compared to 4,34% on Monday evening.
On the stock markets, tourism and transportation stocks particularly benefited from the drop in oil prices. Cruise operator Carnival jumped 9,4% after reporting better-than-expected quarterly results, thanks to strong demand and high onboard spending. Norwegian Cruise Line rose 6%, United Airlines 4,2%, and Delta Air Lines 3,7%.
European and Asian markets also recorded significant gains: indices in France, Germany, Japan, Hong Kong (+2,1%) and South Korea (+3%) all climbed by at least 1%, driven by optimism surrounding the Israeli-Iranian truce and the ebbing of geopolitical tensions.
