NEW YORK ? Oil prices dropped sharply and stock markets rallied around the world on Wednesday after President Donald Trump backed away from an immediate strike on Iran and announced a two-week ceasefire window tied to the reopening of the Strait of Hormuz.

In its market report, The Associated Press said U.S. crude fell 16.4% to $94.41 per barrel while the Dow Jones Industrial Average jumped 1,325 points, with investors betting the move could ease pressure on a crucial oil shipping route.

The rebound followed days of market anxiety. AP's April 5 war update said Trump had threatened to hit Iranian infrastructure if Tehran did not reopen the Strait of Hormuz by Monday, a warning that helped push up energy prices and deepen fears over supply disruption.

Even after the market rally, the risks did not disappear. In a legal and trade analysis published a day later, AP reported that Iran was seeking the right to collect tolls in the strait as part of reopening talks, a proposal economists said could keep energy and fertilizer prices elevated even if open conflict subsided.

The result was a relief rally shaped less by certainty than by the possibility that the worst immediate supply shock might be delayed.