Oil and Dollar Plunge as Markets Rally After US-Iran Ceasefire

Global financial markets experienced a significant rally on April 8, 2026, as oil prices plummeted following a two-week ceasefire agreement between the United States and Iran.

The agreement followed an announcement by President Donald Trump on Truth Social, in which he stated, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!

Iran’s minister of foreign affairs, Abbas Araghchi, confirmed the acceptance of these terms. Araghchi stated that if attacks on Iran are halted, Iranian operations would cease and for a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces.

Energy Markets and Shipping

The ceasefire led to an immediate decline in energy costs as investors anticipated the reopening of the Strait of Hormuz, a critical trade route that handles approximately 20% of the world’s traded crude oil and a similar share of natural gas.

Brent crude futures fell over 11% to $96 per barrel, while West Texas Intermediate (WTI) crude dived nearly 14% to approximately $96. Some reporting indicated oil prices plunged below $95 per barrel.

Signs of the waterway reopening were observed on April 8, 2026, as some ships began transiting the 21-mile-wide waterway.

Global Stock Market Reaction

Equity markets responded with a worldwide relief rally on April 8, 2026. In the United States, the Dow Jones Industrial Average jumped 2.8%, gaining over 1,300 points. The S&P 500 soared 2.5%, and the Nasdaq Composite vaulted 2.8%.

The positive sentiment extended to international markets. In Brazil, the Ibovespa closed above 195,000 points for the first time, and the U.S. Dollar fell to R$ 5.06.

Economic Policy and Inflation

The sharp decline in oil prices has influenced expectations regarding U.S. Monetary policy. The reduction in energy costs has fueled bets that the Federal Reserve will resume interest rate cuts this year, as the risk of sticky inflation has diminished.

This shift follows minutes from the Federal Reserve’s March meeting, which indicated that policymakers previously believed the war in Iran was lifting inflation and delaying potential rate cuts.