Wall Street stocks surged in early trading Wednesday after the United States and Iran agreed to a two-week ceasefire that sets terms to reopen the vital Strait of Hormuz.
- +US Stocks Jump On War Ceasefire Deal As Oil Shares Fall
Airline shares rallied and oil equities retreated as crude prices tumbled in response to the expected return of shipments of oil and other key products through the strait.
Airline shares rallied and oil equities retreated as crude prices tumbled in response to the expected return of shipments of oil and other key products through the strait.
About 20 minutes into trading, the Dow Jones Industrial Average was up 3.0 per cent at 47,998.72.
The broad-based S&P 500 rose 2.6 percent to 6,786,45, while the tech-rich Nasdaq Composite Index soared 3.2 percent to 22,716.15.
US stocks had retreated Tuesday as the market nervously awaited President Donald Trump’s deadline for war-rival Iran to reopen the Strait of Hormuz or face devastating bombing.
Under an eleventh-hour ceasefire, Tehran has agreed to temporarily reopen the narrow waterway, sending oil prices tumbling. But its demands over future control of the strait, uranium enrichment and sanctions are at deep odds with the United States.
Steve Sosnick of Interactive Brokers called Wednesday’s market reaction “somewhat euphoric” but noted that much uncertainty remains.
“I will caution that this is a ceasefire, not a peace treaty,” Sosnick said. “And in some ways, there are still unresolved questions.”
Shares of major US carriers, including United Airlines and Southwest Airlines, rose more than 10 percent, while oil companies such as ExxonMobil and Chevron fell more than five percent.
