Oil prices make stunning plunge and stock futures surge post-ceasefire

Oil prices dropped across the board yesterday after Donald Trump announced a two-week ceasefire with Iran that will see the Strait of Hormuz re-opened.

After the President posted about the deal on Truth Social, American crude oil slid 18 percent to under $93 a barrel, after trading upwards of $117 that very same day. 

The dips mark the largest one-day lowering of oil prices since the Gulf War in 1991.

The prices for natural gas and heating oil also dropped following the announcement of the ceasefire. 

Brent crude oil futures fell around 6 percent to $103.40. Both prices are well above where they were at the start of the war. 

Dow futures went up 1,000 points, Nasdaq 100 futures nearly 3 percent and S&P 500 futures rose by more than 2.5 percent, NBC News reported.

In the bond market, Treasury yields eased on word of a potential cease-fire. The yield on the ten-year Treasury fell to 4.24 percent from 4.30 percent earlier in the day.

This is still well above the 3.97 percent level from before the war, with the increase pushing up mortgage rates and other loans going to American households and businesses, slowing the economy. 

Shipping in the Strait of Hormuz, a chokepoint in the Persian Gulf through which 20 percent of the world's oil normally flows, had been all but halted, sending prices soaring and causing chaos on the stock market.

Trump said Iran has proposed a 'workable' ten-point peace plan that could help end war the US and Israel launched on February 28. 

Iran's Supreme National Security Council said it has accepted a two-week ceasefire and its foreign minister said passage through the strait would be allowed for the next two weeks under Iranian military management. 

Earlier, US stocks swung sharply during regular trading as uncertainty about the war with Iran increased after Trump had threatened that a 'whole civilization will die tonight, never to be brought back again' if Iran did not meet his deadline at 8pm Eastern time to open the Strait of Hormuz. 

Oil prices have spiked because the war has snarled the production and transportation of crude in the Persian Gulf. 

Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran has blocked it to enemies. 

The worry on markets has been that a long-term disruption will keep oil prices high for a long time and send a painful wave of inflation crashing through the global economy. 

Trump kept traders on edge by making a series of threats to blow up Iranian power plants only to delay several times.

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Last year Trump backed down from many of the stiff tariffs he had threatened to impose on imports, though they ultimately ended up being higher than before his second term. 

He posted on Truth Social, 'I agree to suspend the bombing and attack of Iran for a period of two weeks,' after earlier sparking doomsday fears when he threatened to wipe out its 'entire civilization' if they did not reopen the Strait. 

The President said that after talks with Pakistani prime minister Shehbaz Sharif he had been assured that Iran will agree 'to the complete, immediate, and safe opening of the Strait of Hormuz.' 

'This will be a double-sided ceasefire,' Trump wrote. 'The reason for doing so is that we have already met and exceeded all military objectives, and are very far along with a definitive agreement concerning long-term peace with Iran.'

Israel also agreed to halt attacks on Iran for two weeks, a senior White House official told Axios, with the ceasefire taking effect once the Strait of Hormuz is re-opened. 

Iran accepted the Pakistan-brokered deal after a last-minute Chinese intervention urged Tehran to show flexibility over the war's economic fallout, three Iranian officials told The New York Times. 

Iran's ten-point plan, published by state-run Tasnim news agency, demands the US accept Tehran's continued control over the Strait, recognize its right to uranium enrichment, lift all sanctions, pay compensation and withdraw all troops from the region.