U.S. stocks continued their strong advance into Wednesday's closing session, with the Dow Jones Industrial Average climbing more than 1,100 points. Market participants closely monitored the newly established two-week ceasefire agreement between the United States and Iran, which faced immediate challenges as Iran's Parliament Speaker accused the U.S. of violating the truce terms.
The Dow Jones Industrial Average rose by 1,157.49 points, or 2.48%, closing at 47,741.95. The Nasdaq Composite increased by 558.38 points, or 2.54%, to finish at 22,576.23. The S&P 500 gained 146.11 points, or 2.21%, settling at 6,762.96.
Mohammad Bagher Ghalibaf, Iran's Parliament Speaker, leveled accusations against the United States on Wednesday for breaching the two-week ceasefire agreement. In a statement released on social media, Ghalibaf stated, "Our profound historical distrust of the U.S. stems from its repeated violations of commitments in various forms—a pattern that has regrettably repeated itself once again."
This development followed an announcement by the U.S. President on April 7, who declared an agreement to suspend bombing and attacks on Iran for two weeks, conditional upon Iran agreeing to "fully, immediately, and safely" reopen the Strait of Hormuz. The President emphasized that "this will be a two-way ceasefire." The announcement was made via social media at approximately 6:30 PM Eastern Time on April 7, less than two hours before a previously stated "deadline" for airstrikes targeting Iranian bridges and power plants, which was set for 8:00 PM ET that Tuesday.
The President noted that his decision was influenced by conversations with Pakistan's Prime Minister and Army Chief, who appealed for a delay in the planned strikes. He further justified the move by stating that the U.S. had "achieved and exceeded" all its military objectives and had made significant progress toward a final agreement concerning long-term peace and stability in the Middle East. The President revealed that the U.S. had received a 10-point proposal from Iran, viewed as a viable basis for negotiations, adding that most previously contentious issues had been resolved between the two nations, and the two-week period would allow for finalizing the agreement.
This truce announcement triggered a sharp decline in oil prices. West Texas Intermediate crude futures plummeted over 16% to $94.41 per barrel, while the international benchmark Brent crude for June delivery fell more than 14% to $93.67.
According to a statement from Iran's Foreign Minister, Iran's Supreme National Security Council agreed to reopen the Strait of Hormuz for two weeks, contingent upon a cessation of all attacks. The statement indicated that transit arrangements would need coordination with Iranian armed forces. Media reports also suggested Israel had consented to the ceasefire.
A chief market strategist commented, "The announcement of a temporary de-escalation in the Iran conflict isn't entirely surprising. Markets have become more adept at anticipating the administration's next moves. The current concern is whether this familiar 'two-week' framework will lead to a sustainable solution."
The President posted on social media Wednesday morning, stating that the U.S. would cooperate with Iran on removing nuclear materials from the country and that the two nations were discussing potential import tariff and sanction reliefs.
Stocks that had faced pressure earlier in the year saw broad gains. Large-cap stocks like NVIDIA and Amazon rose more than 3% and 4%, respectively. Tesla's stock increased over 4%, while JPMorgan Chase and Boeing advanced more than 2% and 3%.
Conversely, energy stocks, which had surged since the conflict began, mostly declined. ExxonMobil fell over 6%, and Chevron dropped more than 4%.
Investors experienced a mixed trading session on Tuesday, with the S&P 500 edging up 0.08% as traders bet on a potential ceasefire. The Nasdaq Composite posted a modest 0.10% gain, while the Dow declined by 85.42 points. Stocks moved off their session lows in the final hour of Tuesday's trading after the Pakistani Prime Minister appealed for a two-week extension of the deadline for attacking Iranian infrastructure, also requesting Tehran open the Strait of Hormuz for two weeks as a "gesture of goodwill."
The President had previously set 8:00 PM ET on Tuesday as a deadline for Iran to reach a deal to reopen the critical waterway, threatening attacks on power plants and bridges, and even the destruction of its "entire civilization" if terms were not met.
At Tuesday's close, the S&P 500 remained 5.5% below the record high set earlier in the year. The benchmark index had neared a 10% correction in March before rallying on market optimism that the administration would find a path to mitigate the conflict's disruptive impact.
The closure of the Strait of Hormuz had contributed to crude oil prices rising over 70% this year, pushing the national average gasoline price in the U.S. above $4 per gallon for the first time since 2022.
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