Five weeks of held breath just exhaled from the U.S. stock market this morning, and it was worth about $1.5 trillion.
The rally caps a frantic 24 hours. Trump set an 8 p.m. Tuesday deadline for Iran to reopen the Strait of Hormuz or face strikes on its bridges, power plants, and what he called its “whole civilization.” Pakistani Prime Minister Shehbaz Sharif spent the afternoon shuttling between Washington and Tehran, ultimately brokering the framework that became the ceasefire. Trump posted his acceptance on Truth Social with less than two hours to spare.
The truce is very tenuous, Vice President JD Vance admitted this morning. Reports have emerged that fighting continues, particularly on Israel’s part as it reportedly continues to strike Lebanon to try to eradicate Hezbollah for good. Semiofficial Iranian outlet Fars reported that Tehran was “weighing deterrent operations” against what it deems as a violation of the ceasefire. Plus, a drone struck Saudi Arabia’s East-West pipeline, the kingdom’s key alternative route around Hormuz, according to Bloomberg.
No matter for traders. When the opening bell rang, the Dow Jones industrial average surged 1,303 points, or 2.8%, its best day since the war began on Feb. 28. The S&P 500 jumped 165 points, and the Nasdaq 100 vaulted 702 points as every risk asset that had been crushed by the Strait of Hormuz closure went the other way, while energy stocks tumbled nearly into the double digits. Shell fell 4%, Exxon dropped as much as 7.9%, its worst day since May 2022, and LyondellBasell and CF Industries posted their ugliest sessions since March 2020.
With those energy stocks, WTI fell nearly 16% to around $95 a barrel, still well above the $67 level it settled at on Feb. 27, before the war began, while Brent dropped 14% to $93.80.
The Street is already starting to lean in. JPMorgan’s trading desk moved to “Tactically Bullish” Wednesday, telling clients the ceasefire “should trigger a re-risking potentially similar to the post–Liberation Day pivot,” a direct nod to April 2025, when stocks ripped back from the tariff-pause lows. The setup, in many ways, rhymes: Roughly $8 trillion is parked in money-market funds, and Wednesday’s gap-up made clear that liquidity was never the constraint; traders were just looking for a “TACO,” as Trump critics would call it, or a “deal,” as his supporters would say.