A surprise announcement from former US President Donald Trump has sent ripples through global financial markets, triggering a sharp rally in Australian equities and pushing crude oil prices to their lowest level in two months.
Trump announced from the White House on Thursday local time that Washington and Tehran had reached a “great settlement” to end their conflict, confirming he had canceled planned additional military strikes against Iran. “We just made a great settlement of the war with Iran, and we’re going to be subject to finalisation of documents, which should get done over the next few days,” he stated.
Minutes ahead of the Australian sharemarket opening, ASX 200 futures jumped 142 points, or 1.64%, to 8798.5, pointing to a strong bullish open for the benchmark index. Alongside the equity rally, Brent Crude oil fell below $89 per barrel for the first time in two months, while safe-haven gold climbed above $4200 per ounce. The Australian dollar also gained ground against the US dollar, rising 0.78% to trade at 70.48 US cents.
Kyle Rodda, senior financial market analyst at Capital.com, noted that the global market uptick, including Australia’s rally, was directly tied to Trump’s decision to back away from planned escalation. He framed the shift with the informal acronym “TACO” – “Trump always chickens out” – pointing out that the president reversed earlier threats of new strikes against Iran by claiming the two sides had agreed to the final terms of a peace deal.
But despite the market’s positive reaction, Rodda highlighted that both Iran and Israel quickly pushed back against Trump’s claim of a done deal. Iranian foreign ministry spokesman Esmaeil Baqaei clarified that Tehran has not yet reached a final conclusion on any agreement.
Even with the disputed announcement, Rodda explained that the cancellation of new military operations and the clear signal that Trump has little interest in escalating the conflict was enough to drive down oil prices and lift demand for riskier assets across global markets. This development continues to unfold, with more details expected to emerge in coming days as negotiations around the proposed deal progress.