Wall Street’s major indexes posted huge jumps on Wednesday after President Donald Trump announced a two-week delay of military strikes on Iran. The Dow Jones jumped more than 1,300 points, while the S&P 500 and Nasdaq each recorded significant gains of more than 2.5%. The development ended a five-week conflict that had previously paralyzed global equity markets.
World crude oil prices plunged sharply following news of the ceasefire, with WTI and Brent each falling more than 16%. The drop in oil prices below $94 a barrel reflected market relief over the potential reopening of the Strait of Hormuz. Iran has agreed to reopen the strategic waterway for two weeks, subject to a complete cessation of all military strikes.
President Trump said that Tehran’s 10-point proposal was a solid basis for starting formal peace talks. In addition to military issues, Washington and Tehran are reportedly discussing the production of nuclear materials from Iran and the potential easing of economic sanctions and tariffs. The diplomatic move is seen as the most positive turning point since the crisis began in late February.
Technology and transportation sectors led the market gains, with Nvidia, Amazon, and Boeing posting solid gains of more than 3%. In contrast, the energy sector suffered a massive sell-off after enjoying extraordinary gains throughout the war. Oil giants Exxon Mobil and Chevron fell between 6% and 7% in early trading as crude prices plunged.
While the market welcomed the news, analysts warned that the ceasefire would be short-lived. There are concerns about whether the two-week period will be enough to reach a permanent solution or just a temporary reprieve. Investors are now turning their attention to military coordination in the Strait of Hormuz and progress on the details of the nuclear talks promised by both sides.
