A fresh announcement from former U.S. President Donald Trump outlining a timeline for a U.S. military drawdown in the conflict with Iran has triggered a sharp, broad-based rally across global equity markets, lifting Australia’s benchmark ASX 200 and all major Wall Street indices as investors grew increasingly optimistic the oil market crisis could be coming to an end.
On opening bell, ASX 200 futures jumped 137.10 points, a 1.62% gain that pushed the benchmark to 8618.90, following a powerful positive lead from U.S. markets that closed the prior trading session with steep gains. All three major Wall Street indices climbed nearly 2.5% or more on the session: the S&P 500 notched a 2.9% increase, the tech-focused Nasdaq Composite surged 3.83%, and the Dow Jones Industrial Average, a blue-chip index heavy on industrial stocks, added 2.49%.
This market upswing comes on the heels of a brutal March for Australian equities. At Tuesday’s close, the ASX 200 had posted a 7.8% monthly drop, its worst monthly performance since June 2022. The decline was driven largely by widespread investor fears that a prolonged military conflict in the Middle East would keep energy prices elevated, with crude prices surging as much as 50% in a short window amid the tension.
Speaking to reporters in the Oval Office overnight, Trump offered a clear timeline for de-escalation, responding to a question about when U.S. military involvement in the conflict with Iran would conclude by saying he expects American forces to withdraw within “two or three weeks”. “I think two or three weeks. We’ll leave because there’s no reason for us to do this,” Trump stated, adding “We’ll be leaving very soon.”
Tony Sycamore, a senior market analyst at IG, noted that two key factors combined to drive the overnight market surge: fresh signals of de-escalation in the Iran conflict, and cooler-than-expected U.S. labor data that raised expectations the Federal Reserve could cut interest rates in the near term. “Starting with energy prices and the ongoing situation in the Middle East: West Texas Intermediate crude oil is set to finish the day at $US101.56, reversing from the $US106.86 high it hit earlier in the session,” Sycamore explained. “This sell-off was initially triggered by de-escalation headlines that began breaking during the Asian session yesterday, notably President Trump signalling he is willing to wind down the US military campaign against Iran.”
The sudden shift in market sentiment underscores how closely global equity and commodity markets are tied to geopolitical risk in the Middle East, with even tentative signs of conflict de-escalation enough to reverse weeks of investor anxiety driven by surging oil prices.