Most stock markets rose on Monday while oil prices tumbled after United States President Donald Trump announced an “energy ceasefire” between Russia and Ukraine, overshadowing fresh Houthi attacks on Saudi Arabia.
Both main crude contracts dropped more than 1% following Trump’s declaration, despite the announcement causing confusion in Kyiv. Ukrainian officials also reported that Moscow had struck multiple power plants in the country.
“Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine,” Trump wrote early on Sunday on Truth Social. “Both parties have agreed. Do not break it!”
Trump made the post after he called on Ukrainian President Volodymyr Zelensky to stop attacks on Russian refineries. He also said it was “time for Ukraine to get a new president” who would finally settle the war.
Ukraine seeks clarity on ceasefire terms
Zelensky appeared surprised by the announcement and said he was seeking more details. However, he added that “Ukraine supports the ceasefire, and it is important that Russia support it as well”.
Russia has not yet confirmed its agreement to the ceasefire.
While Ukraine’s allies welcomed the announcement, Trump faced criticism after he declared a temporary easing of US sanctions on Russian diesel. European leaders and Kyiv said the move would only embolden Russian President Vladimir Putin.
The drop in oil prices reversed an earlier spike that came after Houthi attacks on Saudi Arabia over the weekend.
Deadly attacks hit Saudi Arabia
At least a dozen people died at Riyadh’s international airport on Saturday in the deadliest attack on Saudi soil for more than 10 years. Another person died following a second strike on Sunday.
The attacks marked a sharp escalation in the Yemen war, where Riyadh has long backed the internationally recognised government against the Houthis.
The Iran-backed group claimed responsibility for multiple attacks over the past 24 hours on Sunday. The group threatened to keep targeting the kingdom’s transit hubs, calling them “a theatre of operations for our forces”.
Markets respond to geopolitical shifts
Stephen Innes from SPI Asset Management said the market no longer pays full geopolitical premium on every headline.
“A strike matters if it threatens real barrels, shipping lanes, refining capacity or insurance costs; otherwise, the market is getting increasingly reluctant to pay up simply because the geopolitical ticker flashes red,” Innes wrote.
“The physical market remains tight enough to keep Brent above $100, but futures are refusing to treat every new escalation as the start of another straight-line inflation shock.”
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The drop in oil prices supported most Asian markets. Hong Kong, Sydney, Singapore, Wellington and Manila all posted gains.
However, Seoul and Taipei fell due to losses in chipmakers SK hynix, Samsung and TSMC. Tokyo markets remained closed for a holiday.
US futures traded sharply higher.
Key economic data ahead
Investors now prepare for the release of key US inflation and retail sales data, which could influence the Federal Reserve’s decision on interest rates. The bank meets at the end of October.
Earnings season also begins this week, with banking giants JP Morgan, Goldman Sachs and Bank of America due to report.
Tech giants will follow later in the month and November. Traders want to gauge the outlook for the artificial intelligence sector after the vast sums of money pumped into it in recent years.
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