Before the bell: investors welcome ceasefire relief

Oil prices fall 15% and Asian markets surge. Europe and the US are preparing for a strong rally.

Just before the ultimatum expired and after markets had closed, Donald Trump and Iran announced a two-week ceasefire yesterday. The Strait of Hormuz will remain open during that period. As a result, the price of a barrel of crude oil is dropping nearly 15% this morning to below 100 dollar. S&P 500 futures are up 2.5%, pointing to a strong day for global equity markets. That was not the case yesterday. A typical European stock, as measured by the Euro Stoxx 50, fell 1.1%. Heavyweight ASML (-4.1%) dragged the index lower, while chemical giant BASF stood out with a gain of 2%. In Brussels, the Bel20 slipped 0.2%. Sofina was the strongest performer within the Belgian benchmark, with the Boël family holding rising 1.7%. In the United States, both the S&P 500 (+0.1%) and the Nasdaq (+0.1%) moved sideways. Chip designer Broadcom gained 6.2%, as investors reacted positively to its deal with Alphabet and Anthropic.

Asian markets are clearly responding positively this morning. Hopes for peace and the ceasefire are lifting the Hang Seng Index (+2.9%) in Hong Kong. In Japan, the Topix is up 3.3%, while South Korea’s Kospi is surging 7.3%. In the United States, investors will today focus on results from airline Delta Air Lines, while RPM International—known in Europe for its Rust-Oleum paint brand—will also report earnings.

Skipper, may I cross the river?

Since the start of the conflict in the Middle East, more than 800 ships have been stranded in the Persian Gulf. Despite the ceasefire announcement and the reopening of the Strait of Hormuz, major shipping companies remain hesitant to immediately send vessels through the strait. They do not fully trust the US president and are waiting for greater certainty. In times of peace, around 135 ships pass through the strait each day. Currently, more than 1,000 ships and 20,000 seafarers are waiting on both sides. These crews are exhausted and facing supply challenges. Relief will come only once they are finally able to resume passage.

Patience rewarded

In Asian markets, investors were able to react quickly to the ceasefire in Iran. In Hong Kong, the biggest gainers this morning included delivery platform Meituan (+10%), toy manufacturer Pop Mart and Alibaba, with the latter two rising 7.3% in tandem. In Japan, Furukawa Electric and Tokyo Electron gained 16% and 9.9% respectively. In South Korea, Daewoo (+30%) and Doosan (+15%) surged. It is a clear reminder of how quickly sentiment can shift. The strongest market days often follow closely after the worst periods. Selling in panic is therefore one of the worst mistakes an investor can make. Spaarvarkens members are well aware of this. Timing the market is nearly impossible—and those who try usually lose money.

Did you know…

that Americans have already consumed nearly 1.2 million tonnes of avocados this year? Donald Trump may not like it, but Mexico continues to export large quantities of the fruit to the US, where it is widely used, among other things, to make guacamole.

This article was translated from Dutch and was originally published on Spaarvarkens.be.