President Donald Trump announced a two-week ceasefire with Iran on Tuesday night, stepping back from a threatened military operation that he had warned would result in the destruction of “a whole civilization.” The announcement was posted to Truth Social roughly 90 minutes before a deadline the president had set for Tehran to reach an agreement regarding the Strait of Hormuz.
Trump stated that he decided to pause the potential bombing campaign following direct conversations with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir. According to the president, the Pakistani leaders requested that he “hold off the destructive force being sent tonight to Iran.” The suspension is contingent upon Iran agreeing to the “COMPLETE, IMMEDIATE, and SAFE OPENING” of the Strait of Hormuz, a vital shipping lane that has faced significant disruption since late February.
Earlier on Tuesday, the president had ratcheted up his rhetoric to an unprecedented level, writing that “a whole civilization will die tonight, never to be brought back again” if Iran failed to meet U.S. demands. This threat was specifically directed at Iranian infrastructure. International organizations, including the International Committee of the Red Cross, had previously warned that such attacks on infrastructure could potentially be classified as war crimes.
Market volatility and asset reaction
The geopolitical tension triggered immediate reactions across global financial markets. Prior to the ceasefire announcement, U.S. stock futures had dipped, with S&P 500 futures falling 0.4% and Nasdaq 100 futures dropping 0.6%. Brent crude oil prices surged to $144.46 per barrel, hitting a new all-time high as the market grappled with the closure of a route responsible for roughly one-fifth of the world’s oil supply.
Cryptocurrency markets experienced heightened volatility throughout the day. Bitcoin initially slipped toward $65,000 as investors fled from risk assets. However, following the confirmation of the two-week ceasefire, sentiment reversed. Bitcoin rebounded, vaulting past $72,000 late Tuesday as risk appetite returned to the markets. Data from the prediction market Myriad previously indicated that traders were pricing in a low probability of regime change in Iran before October, suggesting a market expectation that the conflict would remain unresolved.
Separately, scrutiny continues to surround business entities associated with the president. World Liberty Financial, a blockchain project linked to Trump, is currently facing questions regarding its partnerships. Reports indicate the project engaged with an Asia-based blockchain firm that has ties to individuals previously sanctioned for their alleged involvement in a major fraud network.
