A significant relief rally is now underway, but oil prices are set to remain structurally higher, warns the CEO of one of the world’s largest independent financial advisory organisations.
The warning from deVere Group’s Nigel Green comes as US stock futures surge following President Donald Trump’s decision to suspend military action against Iran for two weeks, easing immediate fears around a prolonged disruption to global energy flows through the Strait of Hormuz.
Global markets responded instantly. Futures linked to the Dow Jones Industrial Average jumped sharply, while the S&P 500 and Nasdaq 100 posted gains above 2%, signalling a powerful rebound in risk appetite.
Oil prices, which had surged amid supply fears, pulled back aggressively as traders priced in a temporary easing of geopolitical risk.
Nigel Green says: “Markets have been primed for this moment. Positioning had become defensive, volatility was elevated, and energy prices were reflecting worst-case assumptions.
“A pause, even a temporary one, releases that pressure very quickly.”
He continues: “A relief rally of this magnitude reflects how stretched sentiment had become.
“Investors were bracing for escalation that could have choked off a fifth of global oil supply. Remove even part of that threat and capital flows back into equities at speed.”
Equity markets had already shown signs of anticipating an off-ramp, with major indices stabilising despite ongoing tensions.
The latest move confirms that investors are highly sensitive to geopolitical signals and willing to rotate rapidly as narratives shift.
Nigel Green explains: “Tech could lead the rebound because it was hit hardest by rising yields and risk aversion. Lower energy prices reduce inflation expectations at the margin, which supports valuations.
“We expect strong moves in megacap tech and AI-driven names.”
He adds: “Consumer discretionary will also benefit. Lower oil feeds through to gasoline prices, which supports spending.
“Airlines, travel, and retail are also going to be immediate winners from cheaper fuel and improved sentiment.”
Financials are also likely to participate in the upswing. Improved market stability tends to support deal activity and risk-taking, both critical for bank earnings.
The deVere chief executive notes: “Banks perform better in environments where uncertainty declines. A pause in conflict reduces tail risks, which is constructive for credit markets and capital markets activity.”
Energy stocks, however, face a more nuanced outlook.
He says: “Energy equities may see short-term pressure as crude pulls back, but the structural backdrop remains tight. Supply constraints have not disappeared.
“A two-week pause does not rebuild inventories or solve geopolitical fragmentation.”
Crude oil remains significantly higher on the year, reflecting underlying supply risks that extend beyond the current conflict. Any reopening of the Strait of Hormuz, even temporarily, provides breathing space but does not eliminate vulnerability in global energy logistics.
Nigel Green cautions: “Oil is unlikely to return to previous lows quickly. The geopolitical premium is now embedded. Even with de-escalation, traders will price in the risk of renewed disruption.”
Central to the market’s next move is the credibility of the two-week window.
He says: “Investors have seen this timeline before. A short-term pause creates relief, but it also introduces a countdown. Markets will quickly shift focus from celebration to scrutiny.”
Diplomatic signals, compliance with ceasefire terms, and coordination over shipping routes through Hormuz will all be closely monitored.
Nigel Green adds: “If progress towards a durable agreement emerges, the rally can extend and broaden. Industrial stocks, emerging markets, and cyclicals would then have room to catch up.”
Failure to convert this pause into a longer-term framework would reverse sentiment just as quickly. “Volatility would return, oil would spike again, and equities would give back gains.”
Market participants are therefore balancing opportunity with caution.
The deVere CEO concludes: “This is a powerful rebound driven by the removal of immediate fear.
“Yet the underlying issues remain unresolved.
“Investors should participate in the upside, while recognising that the next phase depends entirely on whether diplomacy can deliver substance beyond a temporary halt.”