Key insights
- A reported ceasefire deal between the U.S. and Iran triggered a broad market rally, with the S&P 500, Nasdaq, and Dow Jones all climbing nearly 3%. Airlines and travel stocks surged on lower oil prices, while energy stocks declined. Tech stocks rebounded, and Bitcoin also saw gains. The news suggests a potential easing of geopolitical tensions, providing a short-term boost to risk assets.
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A two-week ceasefire deal sent stocks soaring Wednesday.
The S&P 500, Nasdaq, and the Dow Jones Industrial Average all climbed close to 3%, after President Donald Trump posted on Truth Social Tuesday that the U.S. agreed "to suspend the bombing and attack of Iran for a period of two weeks" following a 10-point proposal seen as a "workable basis on which to negotiate."
Airlines and other travel-related stocks were among the biggest gainers on the S&P 500, as oil prices eased. Shares of major oil producers slid along with the prices of the commodities.
Growing optimism about a coming resolution to the war in Iran sent stocks higher across a wide range of industries, with some experts suggesting it could mean more gains ahead for broader markets.
Major airline stocks took off on hopes of a better outlook for fuel prices. United Airlines Holdings (UAL), American Airlines Group (AAL), and Delta Air Lines (DAL) jumped about 8%, 6%, and 4%, respectively. Cruise line operator Carnival Corp. (CCL) popped 11%, while Norwegian Cruise Line Holdings (NCLH) added 8%, and Royal Caribbean Cruises (RCL) rose 4%.
West Texas Intermediate futures, the U.S. crude oil benchmark, plummeted 15% to about $96.53 a barrel, while Brent crude, the global benchmark, sank 13% to $94.75 per barrel. Energy stocks dropped along with the price of oil, with Chevron (CVX) and ExxonMobil (XOM) down between 4% and 5%.
Bitcoin, the world's biggest cryptocurrency, was trading around $71,500 recently, up from its overnight low around $69,000. Shares of crypto-tied companies Robinhood Markets (HOOD), Strategy (MSTR), and MARA Holdings (MARA) climbed between 3% and 6%.
Tech stocks, which have suffered in recent weeks, surged Wednesday to rank among the best-performing sectors in the S&P 500. With the exception of Tesla (TSLA), which slipped 1%, most of the Magnificent Seven members gained. Meta Platforms (META) was the biggest winner of the group, with shares up nearly 7% after the social media company announced its latest AI model.
The outlook for stocks "has clearly improved with this ceasefire" said LPL Financial Chief Economist Jeffrey Roach in a statement Wednesday.
Analysts at Wolfe Research led by Chris Senyek said they believe the deal "strongly sets the stage for near-term peace in the Middle East" and further upside for markets. They'd be buying tech stocks, the analysts wrote in a note to clients Wednesday, with a focus on semiconductors, industrials, and discretionary stocks, as well as groups that would benefit from lower long-term rates such as housing stocks.
"We believe the near-term market bottom is in."
This article has been updated since it was first published to reflect more recent prices.