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Global markets staged a sharp turnaround on Wednesday as a two-week ceasefire between the United States and Iran triggered a broad relief rally, easing fears over disrupted energy supplies.

Oil prices tumbled below the $100 mark, with US crude futures plunging about 16 per cent to $94.59 a barrel and Brent crude falling 15 per cent to $92.35. The decline followed expectations that oil and gas flows through the Strait of Hormuz—responsible for roughly a fifth of global supply—could resume.

The market reaction was swift across asset classes. US S&P 500 futures jumped more than 2 per cent, while European markets surged over 4 per cent. In Asia, Japan’s Nikkei climbed around 5 per cent and South Korea’s Kospi surged 6 per cent, briefly halting trading. A broader Asia-Pacific index also gained about 4 per cent.

The US dollar, which had strengthened during the recent turmoil, weakened broadly as risk appetite returned. Meanwhile, gold prices rose more than 2 per cent, reflecting lingering uncertainty despite the relief rally.

The ceasefire came after weeks of escalating tensions following US and Israeli strikes on Iran in late February, which had disrupted the Strait of Hormuz and sent energy prices soaring, fuelling global inflation concerns.

US President Donald Trump agreed to the ceasefire just hours before a deadline set for Iran to reopen the strategic waterway or face further escalation.

Despite the optimism, analysts cautioned that the rally may be short-lived without a lasting resolution.

“Does it mean people are going to take new risks? No, it doesn’t. It would have to actually be a lasting peace,” said Martin Whetton.

Market participants are now closely watching whether negotiations progress and whether insurers and shipping operators regain confidence to fully resume traffic through Hormuz.

“That will determine whether this remains just a relief rally or starts to look more like a durable de-escalation,” said Charu Chanana.

Bond markets also reflected the shift in sentiment, with yields on US Treasury securities falling to multi-week lows. Meanwhile, currencies sensitive to global risk, such as the Australian dollar and euro, strengthened against the weakening US dollar.

Still, some analysts warned that underlying tensions remain unresolved, keeping the risk of renewed volatility on the table.

“We maintain our view that the war will run into June. The implication is dollar losses may prove short-lived,” said Carol Kong.

The sharp market moves underscore how geopolitical developments continue to drive global financial conditions, with investors balancing short-term relief against longer-term uncertainty.