The rally
US stock markets surged on Wednesday after the United States and Iran announced a two-week ceasefire, ending weeks of market volatility driven by the conflict. The Dow Jones Industrial Average rose 1,325 points, or 2.9 per cent, to close at 47,910 — its best single day in a year.
Why it matters: The Iran conflict had wiped trillions of dollars off global markets and sent oil prices above $115 a barrel. Wednesday’s rally signalled that investors see the ceasefire as a meaningful step toward stability, even if the deal remains fragile.
By the numbers
The S&P 500 gained 2.5 per cent to close at 6,783. The Nasdaq Composite rose 2.7 per cent. European shares climbed 3.9 per cent, and the MSCI World index posted its biggest one-day gain in a year, rising more than 3 per cent.
Oil prices fell sharply. Front-month WTI crude dropped 16.4 per cent and Brent crude fell 13.3 per cent. Both settled below $100 a barrel for the first time since the conflict escalated in March.
A senior Iranian official told Reuters that the Strait of Hormuz, through which one-fifth of the world’s oil passes, could reopen to shipping on Thursday or Friday if both sides agree on a ceasefire framework.
Thursday’s caution
The relief rally lost momentum overnight. US futures turned flat to slightly lower on Thursday morning after Tehran said parts of the ceasefire were being violated, pointing to Israel’s strikes on Lebanon. Iran called the strikes a “grave violation” of the deal.
Analysts warned that the ceasefire’s two-week window is narrow and that markets remain vulnerable to any escalation. Oil prices held steady in early Asian trading, suggesting traders are waiting for clarity on whether the Strait of Hormuz will fully reopen.