A substantial relief rally has swept through global financial markets following President Donald Trump's announcement of a two-week suspension of military action against Iran, but a leading financial advisory executive has cautioned that oil prices are unlikely to return to previous lows anytime soon.
Markets React Swiftly to Ceasefire News
The announcement immediately eased fears over prolonged disruption to energy flows through the Strait of Hormuz, one of the world's most critical shipping corridors. Futures tied to the Dow Jones Industrial Average jumped sharply, while both the S&P 500 and Nasdaq 100 recorded gains exceeding 2%, signalling a strong return of investor risk appetite.
West Texas Intermediate crude, the benchmark US oil price, tumbled to a near two-week low during Wednesday's Asian trading session before partially recovering. The commodity was last trading around the mid-$90 range, still down more than 10% on the day.
Nigel Green, Chief Executive of deVere Group, attributed the scale of the rally to how defensive market positioning had become in the lead-up to the ceasefire agreement.
"Markets have been primed for this moment. Positioning had become defensive, volatility was elevated, and energy prices were reflecting worst-case assumptions. A pause, even a temporary one, releases that pressure very quickly."
Sector Winners and Losers
Green identified technology stocks as likely leaders of any sustained rebound, noting that the sector had been disproportionately hurt by rising yields and risk aversion. He argued that softer energy prices help dampen inflation expectations, which in turn supports equity valuations — particularly among large-cap and AI-focused companies.
Consumer discretionary stocks are also expected to benefit, as lower oil prices filter through to reduced fuel costs for households and businesses. Airlines, retailers and travel companies were singled out as immediate potential winners from both cheaper fuel and an improved market mood.
Financial stocks are similarly positioned to gain, with Green noting that reduced uncertainty tends to encourage deal-making and risk appetite — key drivers of bank revenues in both credit and capital markets.
Energy equities, however, face a more complicated picture. While crude prices have pulled back, Green stressed that the underlying supply environment remains constrained.
"A two-week pause does not rebuild inventories or solve geopolitical fragmentation. The geopolitical premium is now embedded. Even with de-escalation, traders will price in the risk of renewed disruption."
A Countdown, Not a Resolution
Despite the market optimism, Green urged investors not to mistake a temporary pause for a lasting settlement. He noted that the two-week window introduces a deadline that markets will scrutinise closely, with attention turning rapidly to diplomatic progress, compliance with ceasefire terms, and developments around the Hormuz shipping lanes.
Should the pause evolve into a more durable diplomatic framework, Green said the rally could extend further, drawing in industrial stocks, emerging markets and cyclical sectors. However, a failure to consolidate the ceasefire into a longer-term agreement carries significant downside risk.
"Volatility would return, oil would spike again, and equities would give back gains."
For now, crude oil remains considerably higher than at the start of the year, a reflection of supply vulnerabilities that the current ceasefire does little to resolve structurally. The coming two weeks are expected to prove pivotal for both energy markets and the broader global economic outlook.
