TOKYO (AP) — Global shares surged in Wednesday trading, as oil prices plunged after the U.S. and Iran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz.

France’s CAC 40 added nearly 4.0% to 8,223.91 in early trading, while the German DAX edged up 4.7% to 23,996.26. Britain’s FTSE 100 gained 2.3% to 10,582.86. U.S. shares were set to drift higher with Dow futures up 2.3% at 47,891.00. S&P 500 futures rose 2.5% to 6,824.00.

In Asia, Japan’s benchmark Nikkei 225 gained 5.4% to finish at 56,308.42. Australia’s S&P/ASX 200 jumped 2.6% to 8,951.80. South Korea’s Kospi soared 6.9% to 5,872.34. Hong Kong’s Hang Seng surged 3.1% to 25,893.02, while the Shanghai Composite added 2.7% to 3,995.00.

Benchmark U.S. crude sank $16.47 to $96.48 a barrel. Brent crude, the international standard dropped $13.79 to $95.48 a barrel. Natural gas futures declined 5%.

The drops reversed some of the rise in oil prices, following the start of the war, which had effectively blocked passage through the strait that’s a crucial route for global supplies.

“Yet the mood remains one of cautious optimism rather than outright celebration. The ceasefire is only two weeks long, and markets will be watching closely to see whether shipping through the Strait of Hormuz normalizes as promised and whether the fragile truce can pave the way for a more durable peace agreement,” said Tim Waterer, chief market analyst at KCM Trade.

Late Tuesday, Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets. Iran’s foreign minister said passage through the strait would be allowed for the next two weeks under Iranian military management.

In currency trading, the U.S. dollar fell to 158.35 Japanese yen from 159.52 yen Wednesday. The euro cost $1.1671, up from $1.1597. The dollar usually becomes a safe haven during geopolitical uncertainty, so the ceasefire deal worked to lessen that appeal.

But analysts warned against too much optimism.

“There is a reason to be optimistic, but it is still too early to tell, because, as you know, after all, it is Trump,” said Takashi Hiroki, chief strategist at MONEX.

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Associated Press videographer Mayuko Ono in Tokyo and Writer Jon Gambrell in Dubai, United Arab Emirates, contributed to this report.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

Yuri Kageyama, The Associated Press