Global financial markets surged on Wednesday as investors rapidly repriced the likelihood of a shorter-than-expected conflict between the United States and Iran, following comments from US President Donald Trump that Washington’s military campaign could conclude within two to three weeks.
The market reaction was swift and broad. The S&P 500 rose 0.8% and added to its powerful jump from the previous session, which was its best since last spring, while South Korea’s Kospi surged 8.4% as Asian markets caught up to Wall Street’s gains. European indices also advanced more than 1% in France, Germany, and the United Kingdom.
Oil prices fell back toward $100 per barrel after Trump claimed that Iran had asked the United States for a ceasefire, a statement Iran’s Foreign Ministry quickly described as false and baseless. The retreat in crude was significant given that Brent had spiked sharply after the war began, with the Strait of Hormuz, through which roughly one-fifth of the world’s traded oil passes, remaining under Iranian control.
Nigel Green, Chief Executive Officer of global financial advisory firm deVere Group, said the speed of the market move reflects how aggressively traders are betting on a defined timeline. “Markets are, effectively, now trading a two or three week war scenario based on Trump’s latest comments,” he said. “The market reaction is now feeding directly into pricing across equities, oil and currencies.”
Green noted that the pullback in oil is doing significant work across the broader financial system. As crude retreats, inflation expectations ease and pressure on interest rates softens, amplifying gains in equities and reinforcing the shift in sentiment across asset classes.
US Secretary of State Marco Rubio said the US was achieving its objectives ahead of schedule, describing the destruction of Iran’s navy and air force as largely complete and noting that the country’s missile launchers and production facilities were being systematically dismantled.
However, analysts and investors remain cautious. Hope has been quick to swing to doubt on Wall Street since the war began, triggering sharp swings back and forth in financial markets, and investors say Trump’s statements are becoming less impactful for prices.
Iran’s Foreign Minister Abbas Araghchi told Al Jazeera that his country is prepared for at least six months of conflict and denied that any negotiations with Washington are under way.
Green warned that the current rally rests on an unconfirmed assumption. “This rally is built on a defined timeline that hasn’t been confirmed. If that timeline slips or the situation deteriorates, markets will have to reprice just as quickly,” he said. “If it holds, risk assets will extend gains. If it doesn’t, the reversal will be just as sharp.”
