Quick overview

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Markets celebrated the truce between the United States and Iran: stocks rallied while oil prices plunged, although doubts remain about how long the agreement will last.

Wall Street posted strong gains on Wednesday, April 8, driven by expectations of easing tensions in the Middle East after U.S. President Donald Trump announced a temporary ceasefire with Iran. The news also triggered a drop of more than 12% in oil prices.

In this context, the Dow Jones Industrial Average rose 2.85% to 47,910.79 points; the S&P 500 advanced 2.52% to 6,783.48 points—its highest level since early March—and the Nasdaq Composite gained 2.80% to 22,635.00 points.

For now, diplomacy has managed to cool tensions in the Middle East. Market participants had been on edge ahead of a Tuesday 8:00 p.m. (ET) deadline set by Trump for Tehran to reopen the Strait of Hormuz or face attacks on its energy infrastructure. A request from Pakistan, a key mediator, to extend the deadline and respect a two-week truce helped improve market sentiment.

Only hours before the deadline, Trump announced via X (formerly Twitter) that he had accepted Pakistan’s request, conditional on the immediate reopening of the strait. He also said Iran had submitted a 10-point proposal as the basis for negotiations.

Iranian Foreign Minister Abbas Araghchi said Tehran would halt its defensive operations and facilitate safe passage through the Strait of Hormuz if maritime traffic were coordinated with its military.

Market reaction

Wall Street futures had already reacted positively after Tuesday’s close and extended gains on Wednesday, with major indexes surging from the opening bell.

Trump later provided more details about the truce: “The United States will work closely with Iran (…) there will be no uranium enrichment and progress will be made in eliminating nuclear material.”

He also said negotiations on reducing tariffs and sanctions would continue, adding that many elements of the agreement were already advancing.

At the same time, Israel continued attacks against Hezbollah, while Iran accused Israel of violating the ceasefire.

The Israeli government backed the agreement, although it did not include Lebanon, where strikes continued. According to the The Wall Street Journal, Israel was informed late and was not fully satisfied with the terms.

Relief that could prove temporary

Reports of ceasefire violations failed to halt market optimism.

Oil prices plunged:

• Brent crude: −12.8% to $95.26
• West Texas Intermediate (WTI): −15.2% to $95.7.

Notable Movers on Wall Street

The market saw strong sector rotation:

• Travel-related stocks surged: Southwest Airlines (+6.6%), Norwegian Cruise Line (+7.6%), United Airlines (+7.8%), and Carnival Corporation (+11%).
• Airline stocks rose roughly 7% on average, though Delta Air Lines (+3.7%) lagged after issuing weak earnings guidance.
• The energy sector of the S&P 500 dropped sharply due to the collapse in oil prices.
• LyondellBasell (−7.5%) and APA Corporation (−7.6%) were among the hardest hit.
• Meta Platforms rose 6.5% following the launch of its new AI model.