U.S. stocks surged Wednesday after the United States and Iran agreed to a two-week ceasefire, with the S&P 500 soaring 2.1%, the Nasdaq Composite vaulting 2.6% and the Dow Jones Industrial Average jumping 2.3%, or more than 1,000 points. The move came after President Trump called for a suspension in hostilities and said on Truth Social, “I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!”
Abbas Araghchi responded soon after, saying Iran would halt its operations if attacks on Iran stopped and that safe passage through the Strait of Hormuz would be possible for two weeks through coordination with Iran’s Armed Forces. Some ships had already transited the strait after the announcement, easing one immediate fear in a market that has been bracing for a wider energy shock.
The biggest reaction showed up in crude. Brent futures fell more than 16% to just above $91 a barrel, while West Texas Intermediate dropped almost 18% to about $93. The selloff in oil helped push the major averages back above their 200-day moving averages, with the Dow, Nasdaq and S&P 500 all surging more than 2.5% at one point. The Russell 2000 climbed to within 3% of its January record high, and the Dow Jones Transportation Average rose 4% to its first intraday record high since February.
Read Also: Donald Trump Spurs Dow Jones Industrial Average 0.3% Gain Ahead
The Strait of Hormuz is a 21-mile-wide choke point for shipping and energy flows, so even a brief easing of tension can change pricing across stocks, oil and rates in a hurry. Lower oil also strengthened bets that the Federal Reserve may resume interest rate cuts later this year, and minutes from the Fed’s March meeting were due Wednesday, adding another layer of attention to the market’s reaction.
Read Also: Trump Tweet Today: Trump's Iran threat sparks sarcastic embassy backlash
There was also support from company results. Delta Air Lines stock jumped after reporting first-quarter earnings that beat expectations, adding to the sense that investors were willing to chase risk once the immediate threat from the Middle East eased. For now, the market is treating the ceasefire as more than a headline and less than a guarantee.
