US stock markets opened sharply higher on Wednesday after President Donald Trump said he would pause attacks on Iran for two weeks. This eased fears after weeks of conflict that had disrupted global energy supply.
At 9:30 AM ET, the Dow Jones rose 1,316.61 points, or 2.83 percent, to 47,901.07. The S&P 500 gained 156.01 points, or 2.36 percent, to 6,772.86, while the Nasdaq climbed 630.54 points, or 2.86 percent, to 22,648.39.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump posted on Truth Social. “We received a 10-point proposal from Iran, and believe it is a workable basis on which to negotiate.”
Iran on truce
Iran’s foreign minister Abbas Araghchi confirmed the agreement soon after, saying that if attacks stop, Iran will also halt its operations and allow safe passage through the Strait of Hormuz during the two-week period.
Some ships have already begun passing through the narrow but critical waterway, which carries a large share of global oil supply. This reopening is expected to have an immediate impact on energy markets.
Markets react to easing tensions
“It wasn’t much of a surprise that there was an announced reprieve in the Iranian conflict. The market has gotten much better at sniffing out” Trump’s next move, said Jay Woods, chief market strategist for Freedom Capital Markets told CNBC. “The concern now is if this all too familiar ‘two-week’ timeframe is going to lead to a resolution.”
Markets got another lift after Trump said the US is working with Iran on removing nuclear material and discussing tariff and sanctions relief.
Stocks that had been under pressure rallied strongly. Nvidia and Amazon rose more than 3 percent, Tesla gained over 2 percent, and shares of JPMorgan and Boeing jumped more than 4 percent.
Oil prices fall but risks remain
“The reopening of the Strait of Hormuz and the two-week ceasefire have clearly taken away the immediate worst-case risk for global markets… oil prices had surged above $120… but have now corrected sharply by nearly 13–15% to sub $100 levels following the announcement,” said Viram Shah, Co-Founder and CEO, Vested Finance.
He added that while this has brought relief, it is only a temporary pause and markets could react quickly if tensions rise again. He also noted that oil supply disruptions were significant and it may take time for fuel supply chains and shipping to fully return to normal.
Impact on sectors and sentiment
The easing of tensions also pushed oil prices lower, reducing concerns about inflation and supporting government bonds. At the same time, improved risk sentiment lifted AI-related stocks like Nvidia, Meta, Tesla, AMD and Micron, which surged between 4 percent and 10 percent in pre-market trading.
Airline stocks also rose on expectations of better jet fuel supply, with Delta jumping 12 percent after reporting its earnings.
Officials from Oman and other Gulf countries had opposed Iran’s proposed toll system in the Strait of Hormuz, adding to the pressure for reopening the route.
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