Global markets opened the week with the most pronounced risk-on shift since the Iran war began six weeks ago, as Asian indexes jumped, European futures pointed to broad gains and Brent crude shed more than $10 a barrel in early trading after the joint Islamabad statement Sunday announced a ceasefire between Iran, Israel and the United States set to take effect at 00:00 GMT on Wednesday.

Brent for June delivery traded as low as $95.80 on ICE in early London hours, down $11.45 from Friday’s settlement, before paring losses to trade near $98.30 by mid-morning. West Texas Intermediate fell in tandem to $93.20. The slide pushed crude back below levels last seen in mid-February, before the first U.S. strikes inside Iran, and erased what traders had begun calling the “Hormuz premium” of roughly $25 a barrel that had accumulated since March 1.

“This is what a regime change in pricing looks like,” said Maren Loftus, head of oil research at Helvetia Commodities in Geneva. “You don’t get incremental adjustment when a ceasefire actually arrives — you get a single repricing event. The OPEC+ barrels are already in the water, war-risk insurance is about to collapse, and the spec longs that ran this market up are now climbing over each other to exit.”

Equities responded in kind. Tokyo’s Nikkei 225 closed up 4.2%, its largest single-session gain in nearly three years. Hong Kong’s Hang Seng rose 3.6% and the Shanghai Composite added 2.1%. South Korea’s Kospi gained 3.8%, paced by exporters and shipping names. India’s Nifty 50 climbed 2.4%. In Europe, the Stoxx 600 was indicated up roughly 2.7% at the open, with German and French futures gaining 3% and the FTSE 100 lagging at plus 1.4%, dragged by its heavy weighting in energy majors.

U.S. equity futures pointed to a strong open. S&P 500 futures rose 2.1%, Nasdaq 100 futures climbed 2.6% and Dow futures gained 1.7%. Pre-market trading showed airlines, shipping operators and consumer discretionary names leading; oil majors and defense contractors lagged. ExxonMobil and Chevron were each indicated down more than 4% in pre-market. Lockheed Martin, Raytheon Technologies and Northrop Grumman were each off between 3% and 5%.

The ceasefire framework, signed by mediators from Pakistan, Saudi Arabia and Egypt and endorsed in writing by Iranian Foreign Minister Abbas Araghchi, Israeli Defense Minister Yoav Gallant and U.S. Secretary of State Marco Rubio, sets a 36-hour wind-down window. UN observers are to deploy to the Strait of Hormuz beginning Tuesday. A prisoner exchange is to follow within five days in Doha. The statement does not address sanctions or the longer-term nuclear question, both of which negotiators said would be taken up in separate tracks beginning later this month.

Currency markets registered the shift sharply. The dollar index slipped 0.9% as safe-haven flows reversed. The Swiss franc weakened 1.4% against the dollar, the Japanese yen lost 1.1%, and gold tumbled 2.8% to $2,318 an ounce, the largest single-session decline since November 2024. Bitcoin, which had become a partial proxy for war-risk hedging in retail flows, fell 4.2% to $74,600.

Bond markets reflected a parallel rethink. The U.S. 10-year Treasury yield rose 12 basis points to 4.08% in early Asian trading as bid for safety unwound. German bunds sold off similarly, with the 10-year yield up 9 basis points to 2.74%. Fed funds futures, which had been pricing a roughly 55% probability of a June rate cut on Friday, retraced to 38% by Monday morning as traders concluded the central bank now has more room to wait.

“The inflation impulse that was building from oil is about to reverse, but the labor market and services prints have been sticky enough that the Fed doesn’t have to rush,” said John Reilly, a rates strategist at Citi. “If Brent settles around the mid-$90s and stays there through May, the second-half disinflation path looks materially easier. That argues for patience, not panic-cutting.”

Shipping and insurance markets, which had become one of the war’s most punishing collateral channels, eased fastest of all. The Baltic Dirty Tanker Index was indicated down nearly 9% in early quotes. Two London-based marine underwriters said war-risk premiums for transits of the Strait of Hormuz, last quoted near 1.4% of hull value Friday, were being marked down to a 0.65% to 0.85% range on Monday morning, contingent on the ceasefire taking effect on schedule. The Suez Canal Authority reported a 14% jump in booking notifications over the weekend.

Asian airline stocks rallied across the board. Singapore Airlines climbed 6.3%, Cathay Pacific gained 7.1%, Korean Air rose 8.4% and ANA Holdings was up 6.7%. European carriers were indicated higher in pre-market, with Lufthansa, Air France-KLM and IAG each up between 7% and 9%. U.S. carriers in pre-market trading: Delta plus 7.8%, United plus 8.6%, American plus 8.1%.

Not every desk was buying the celebration. “The window between announcement and effect is the dangerous part,” said Layla Hassan, a Beirut-based regional analyst at the Gulf Strategic Forum. “We have 36 hours where both sides have an incentive to land last shots. Iran’s hardliners want a final salvo for the domestic record. Israel will want one more nuclear site. Markets are pricing a clean handoff. History is rarely that clean.”

That caution showed in volatility pricing. The Cboe Volatility Index futures curve fell across the board, but the front-month contract held above 19, well below the late-March peak of 32.7 but elevated relative to where a fully priced-in ceasefire would imply. Brent options skew remained slightly bid for upside, with one-month $110 calls trading at a premium to equivalent puts — a residual hedge against the ceasefire failing to hold.

Analysts at Goldman Sachs cut their second-quarter Brent forecast to $94 from $104 and trimmed the year-end target to $86. Citi went further, calling for $88 by end-June and warning that if OPEC+ does not unwind some of its April production hike at the next meeting, “the market risks overshooting to the downside as the Hormuz premium fully evaporates and Saudi spare capacity returns to balance.”

Earnings season provides the next concrete test. JPMorgan Chase, BlackRock and Citigroup report Tuesday morning before the open. The first read on bank trading desks during the war quarter will set the tone for the financial-sector recovery. Traders said positioning into the U.S. open was leaning aggressively long, with options dealers reporting heavy demand for upside S&P call spreads expiring Friday.

Markets will look to the Wednesday midnight effective date as the next binary catalyst, with officials in Washington, Tel Aviv, Tehran, Riyadh and Islamabad expected to issue coordinated confirmations or, if violations emerge in the interim, contingent statements outlining further steps.