Oil prices slid, stocks and bonds surged, while the safe-haven dollar was knocked back on Wednesday, as a two-week Middle East ceasefire brought some relief to markets on hopes for a resumption of oil and gas flows through the Strait of Hormuz.

The news capped weeks of market volatility and geopolitical upheaval after US and Israeli strikes on Iran at the end of February pushed tensions to the brink, with Tehran effectively choking off the strategic waterway that typically carries about 20% of the world’s energy supplies.

US President Donald Trump on Tuesday agreed to the ceasefire less than two hours before his deadline for Iran to reopen the strait or face devastating attacks on its civilian infrastructure.

Market reaction was swift and dramatic, with US crude futures down around 15% to $96.31 a barrel, while Brent futures also slid 13% to $94.71 per barrel.

Also Read: US and Iran agree to Pakistan’s two-week ceasefire framework

S&P 500 futures rose 2.5%, while European futures leapt more than 5%. US Treasuries rallied while futures for German Bunds and French OATs surged.

The US dollar fell broadly, having been the haven of choice during the tumult.

In Asia, Japan’s Nikkei jumped about 5% while South Korea’s KOSPI vaulted 6%, triggering a brief halt in trading. That left the MSCI’s broadest index of Asia-Pacific shares outside Japan up 4%.

“When you factor in that the two-week delay is longer than the original 10-day window set for the initial attack, it seems plausible that the worst of the conflict may now be behind us,” said Matt Simpson, a senior market analyst at StoneX.

“Markets can worry about the complexities later. For now, they’ve been given the green light to rally.”

Two weeks of relief

The six-week conflict had sent oil prices soaring, reignited inflation fears and thrown the global rates outlook into disarray, forcing governments and companies to scramble for cover against a sudden energy shock.

Trump’s social media announcement on the ceasefire marked an abrupt reversal from hours earlier, when he issued an extraordinary warning that “a whole civilisation will die tonight” unless his demands were met.

Beyond the immediate relief, investors remain keen to see whether the ceasefire leads to a broader resolution before placing major bets.

“Does it mean people are going to take new risks? No, it doesn’t,” said Martin Whetton, head of financial markets strategy at Westpac. “It would have to actually be a lasting peace (to change things). People aren’t actually taking risks.”

Gold prices climbed 2.5% to $4,820 per ounce.

Meanwhile, New Zealand’s central bank kept its policy rate unchanged, as expected, buying time to assess the fallout from the war but signalling it would act decisively if inflation heats up.

The comments underscore the challenge facing global central banks as the energy price and supply chain shocks from the war take time to normalise, leaving price pressures intact.

Read More: PSX surges over 12,000 points after Pakistan‑brokered US‑Iran ceasefire

Some analysts are also sceptical that the ceasefire will translate into lasting peace, warning of likely twists and turns ahead.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the conflict’s root causes remain unresolved, keeping the risk of re‑escalation firmly intact. “We maintain our view that the war will run into June. The implication is dollar losses may prove short-lived.”

US Treasuries surged after the announcement, with traders putting the prospect of rate cuts from the Federal Reserve later in the year back on the table, although doubts about whether oil prices will go back to pre-war levels kept enthusiasm in check.

The yield on the benchmark US 10-year Treasury note dropped 10 basis points to 4.241%, the lowest since mid-March. The yield on monetary policy-sensitive US 2-year Treasury notes sank 10.7 bps to 3.725%.