June 24, 2025 – BlogHear.com
In a dramatic shift following days of heightened tension, U.S. President Donald Trump announced a ceasefire between Israel and Iran, triggering sharp movements across global financial markets. Oil prices slumped, major stock indexes rallied, and the U.S. dollar retreated as investors welcomed signs of de-escalation.
Brent crude futures dropped by more than 3%, settling near $69.11 per barrel, the lowest level since June 11. U.S. West Texas Intermediate (WTI) crude fell 3.2% to $66.32 per barrel, extending Monday’s 7% plunge after Iran issued only a symbolic retaliation to recent U.S. airstrikes on its nuclear sites.
With the threat to oil transit routes such as the Strait of Hormuz seemingly receding, markets regained their footing. S&P 500 futures jumped 0.9%, Nasdaq futures climbed 1.1%, and Europe’s Stoxx 600 gained 1.4%. Asian shares also rallied, with the MSCI Asia-Pacific Index outside Japan rising 2.2% and Japan’s Nikkei up 1.1%.
Investor Sentiment Shifts Despite Ongoing Tensions
Despite ongoing verbal sparring, including Israeli Defense Minister Israel Katz’s threat to respond to alleged Iranian missile launches—which Tehran denied—markets remained focused on easing geopolitical risk.
“Investors mostly shrugged at what appeared on the surface a seismic geopolitical event over the weekend,” said Kenneth Broux, head of FX and rates research at Société Générale. “Those who held off from de-risking have so far been proven right.”
Currency and Commodity Movements
The dollar fell sharply, losing 0.77% against the Japanese yen, landing at 145.00 yen, down from a six-week high of 148. The euro climbed 0.2% to $1.1602, bolstered by falling oil prices which benefit energy-importing economies like the EU and Japan.
Meanwhile, gold prices dropped 1.3%, sliding to $3,323 per ounce, as the appetite for risk returned and demand for safe-haven assets diminished.
Bond Markets and Rate Cut Outlook
The bond market was less influenced by the geopolitical reprieve and more focused on domestic developments. German yields climbed as the government unveiled a draft budget requiring record investment and higher borrowing. Germany’s 30-year yield rose 8 basis points to 3.065%, while U.S. 10-year Treasury yields edged up 2 basis points to 4.34%.
Investors continue to watch the U.S. Federal Reserve for signs of monetary policy shifts. While Vice Chair Michelle Bowman hinted on Monday that interest rate cuts could be on the horizon due to rising labor market risks, Fed Governor Christopher Waller last week expressed openness to a July rate cut. However, Fed Chair Jerome Powell, set to testify before Congress Tuesday, has so far struck a more cautious tone.
Markets are pricing in only a 22% chance of a rate cut in July, though expectations are stronger for a September easing.
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