Global Markets Rebound as US-Iran Ceasefire Hopes Drive Oil Below $100, Gold Surges
Stocks rally across Asia and Europe as investors react to 15-point peace proposal; Brent crude drops nearly 6% after four weeks of conflict
KASHMIR — March 25, 2026 — Global financial markets staged a sharp rebound on Wednesday, March 25, as reports of a potential US-brokered ceasefire between Israel and Iran sent oil prices tumbling below $100 a barrel for the first time in nearly two weeks and sparked a broad rally across equities .
Brent crude futures fell 5.92 percent to $98.30 per barrel in early Asian trading, while US West Texas Intermediate crude dropped 5.01 percent to $87.72, according to AFP . The slide extended later in the session, with Brent touching an intraday low of $97.18 — a decline of up to 7 percent — before stabilizing .
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The sell-off in oil prices came after reports that the United States had transmitted a 15-point peace proposal to Iran aimed at ending the conflict that erupted on February 28. US President Donald Trump said Washington was making progress in negotiations with Tehran and that Iran was “eager to strike a peace deal” .
Iranian officials have publicly denied holding direct talks with Washington. A spokesperson for the Iranian Armed Forces accused the United States of “negotiating with itself,” according to Reuters . Nevertheless, Tehran has signaled it will allow “non-hostile” foreign vessels to pass through the Strait of Hormuz — a significant concession that could ease the energy supply crisis that has gripped global markets for nearly a month .
Oil Plunges on Ceasefire Optimism
Crude prices have been the epicenter of market volatility since the conflict began on February 28. Brent crude had surged above $110 per barrel earlier this month, fueled by fears that Iran’s closure of the Strait of Hormuz would choke off nearly one-fifth of global oil and liquefied natural gas supplies .
Tuesday’s trading session saw both benchmarks climb nearly 5 percent before retreating in volatile post-settlement trade . But the emergence of a concrete peace proposal triggered a rapid reversal, with traders unwinding positions built on expectations of prolonged conflict.
“The slide followed reports that the United States had put forward a 15-point proposal to Iran aimed at ending the ongoing conflict,” The Times of India reported, citing market analysts . President Trump added that if the two nations agree to a deal, oil prices would “drop like a rock” .
International brokerage Macquarie told ET that even if tensions ease in the near term, oil prices are expected to hold firm in the $85–$90 range, with a gradual climb back toward $110 once normal flows through the Strait of Hormuz resume . The firm cautioned that if disruptions continue through April, Brent prices could still rise to $150 per barrel .
Asian Stocks Surge, US and European Markets Follow
Equity markets across Asia rallied sharply on the ceasefire optimism. Japan’s Nikkei 225 index surged more than 3 percent, while South Korea’s Kospi gained over 3 percent, according to reports . Australia’s S&P/ASX 200 also advanced as investors cheered the prospect of de-escalation in the world’s most critical energy-producing region .
European markets opened higher, with the pan-European STOXX 600 index gaining more than 1 percent in early trading . US equity-index futures rose more than 0.7 percent ahead of the Wall Street open .
The rally marked a sharp reversal from Tuesday’s session, when US stocks closed in the red. The Dow Jones Industrial Average fell 0.18 percent to 46,124.06, while the S&P 500 declined 0.37 percent to 6,556.37, and the Nasdaq Composite dropped 0.84 percent to 21,761.89 .
Gold Rebounds as Inflation Fears Ease
Gold prices surged more than 2 percent on Wednesday, March 25, recovering from four-month lows touched earlier in the week as a softer dollar and easing inflation concerns bolstered the metal’s safe-haven appeal .
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Spot gold rose 2.5 percent to $4,587.09 per ounce, while US gold futures for April delivery gained 4.2 percent to $4,586.10 . The rally followed a dramatic sell-off that saw gold plunge more than 20 percent from its January peak of $5,594.82, as investors had abandoned the traditional safe-haven asset in favor of the US dollar during the peak of the crisis .
“The drop in oil prices helped support gold by easing inflation expectations, which in turn reduced pressure on central banks to keep interest rates higher for longer,” analysts at Investing.com reported . “Lower energy costs can dampen bond yields and weaken the dollar, both of which tend to benefit non-yielding assets such as gold” .
Christopher Wong, a strategist at OCBC, told Business Standard: “Near-term, gold is likely to stay sensitive to Federal Reserve policy path expectations, USD and geopolitical developments, but the rebound suggests dips may continue to find support unless real yields move meaningfully higher” .
Central Banks Watch Energy Markets Closely
Despite the easing of crude prices, central banks remain on high alert for second-round inflationary effects from the month-long conflict. Federal Reserve Governor Michelle Bowman indicated Tuesday that monetary policy would need to remain restrictive “until there is a convincing moderation in inflation” . The Fed’s preferred inflation gauge, the personal consumption expenditures index, stood at 2.8 percent in January, well above the 2 percent target .
In Europe, ECB Governing Council member Mārtiņš Kazāks warned that “if inflation spreads from the energy sector, then we would need to raise rates,” adding that the situation could still worsen . Market pricing now fully reflects three quarter-point rate hikes from the European Central Bank this year .
The Bank of England’s chief economist, Huw Pill, said the central bank stands “ready to take action” against inflationary pressures stemming from the Middle East conflict .
Straits of Hormuz Remain Key Flashpoint
Despite the ceasefire optimism, the Strait of Hormuz remains the central pressure point in the conflict. According to market cited by China Finance Information, merchant vessel transits through the strait have fallen by 95 percent since the conflict began . The strategic waterway handles approximately 20 million barrels of oil daily — about one-fifth of global production — and roughly 20 percent of liquefied natural gas trade .
Iran has indicated it will permit vessels from non-hostile nations to transit the strait, but the terms of access remain unclear. “It all comes down to the re-opening of the Strait of Hormuz,” Matt Maley of Miller Tabak told The Economic Times. “If we hear that ‘good progress is being made’ in the negotiations, it won’t be enough if the Strait remains very restricted” .
In a related development, Kuwaiti authorities reported on Wednesday that drones targeted a fuel tank at the country’s airport, though no casualties were reported . Israel said it conducted strikes on targets across Tehran, underscoring that active hostilities continue despite diplomatic overtures .
Economic Impact Across Asia
The energy crisis triggered by the conflict has prompted emergency measures across Asia. Philippine President Ferdinand R. Marcos Jr. declared a national energy emergency on Tuesday, March 24, citing the Strait of Hormuz closure as a direct threat to the country’s fuel supplies .
South Korean President Lee Jae-myung announced Monday that his government is preparing to activate emergency mechanisms to address potential long-term energy disruptions, ordering a full review of supply chains and alternative import channels .
In Japan, February core consumer inflation slowed to 1.6 percent — the smallest increase since March 2022 — as the impact of higher energy costs had yet to fully filter through the economy .
Market Outlook
As of mid-day trading in Europe on Wednesday, March 25, market sentiment remained cautiously optimistic, with investors monitoring headline risk from the Middle East and awaiting further clarity on the US peace proposal.
Analysts warned that volatility would likely persist as long as the Strait of Hormuz remains partially closed and hostilities continue.
“Despite gold prices trading ~17 percent below pre-conflict levels amid USD strength and broad-based de-risking, this flush has historically been a tactical dip to buy, and the bullish case strengthens the longer the conflict persists,” JPMorgan said in a note cited by Business Standard .
For oil, analysts maintain a “buy-on-dips” stance as long as key support levels hold, though they caution that any renewed escalation could quickly send prices back toward $150
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