Markets Rebound on Postponed Iran Strikes

Global markets moved sharply higher after the US President postponed expected military action aimed at Iranian energy infrastructure, easing near-term risk pricing across assets.

The shift in expectations quickly fed through to oil, equities, and government bonds, as traders reduced positions tied to an immediate escalation scenario.

Oil prices drop as immediate supply fears ease

Crude prices fell after having recently traded above $114 a barrel, reflecting a pullback in concerns about disruption to energy flows.

Brent, the main international benchmark, slid about 10% to $96 before recovering to around $100. US benchmark WTI also dropped roughly 10% to $88.50 a barrel.

Equities rise; bonds catch a bid

Stock markets rallied on the de-escalation signal. In the US, the S&P 500 rose 2%.

In Europe, the Stoxx 600 turned higher and traded up 1.5%, while Germany’s Dax gained 2.3%.

Government bonds also reflected improved sentiment. In the UK, two-year gilt yields fell 0.23 percentage points to 4.35%, and 10-year gilt yields declined 0.14 percentage points to 4.86%.

In the US, the 10-year Treasury yield edged down 0.05 percentage points to 4.34%.

Rate expectations shift, highlighting macro sensitivity

Interest-rate pricing adjusted alongside the move in energy. Swaps traders reduced expectations for Bank of England tightening to two increases this year, down from four previously priced.

This matters for markets because energy prices can influence inflation expectations, which in turn affects how investors price central-bank policy paths and the valuation of risk assets.

Geopolitical uncertainty remains

Separately, an Iranian official, not identified by name, said there were no negotiations underway related to the situation.

The same official said the Strait of Hormuz would not revert to its pre-conflict status. The statement adds uncertainty for energy and shipping markets given the strait’s role in global oil transit, though the source material provides no further operational details.

For investors and policymakers, the day’s moves underline how quickly geopolitical headlines can reprice commodities, equities, and rates. What remains unclear is how long the postponement lasts and whether conditions around regional shipping routes change further.