Dow Jones closes 1300 pts higher as US-Iran ceasefire sparks global rally

• West Texas Intermediate crude fell more than 16% to $94.41 per barrel, its biggest daily drop since April 2020, as Iran signaled it would reopen the Strait of Hormuz through which one-fifth of global oil flows.
• Cyclical and energy-sensitive sectors led gains, with semiconductor stocks jumping over 5% (Micron up 7%, Broadcom up 5%) and Meta surging 6.5% after unveiling its new AI model.
• Doubts remain over the ceasefire's durability as Iran's parliamentary speaker claims the US violated the truce and Hezbollah continues rocket attacks on Israel not covered under the agreement.

Market Summary: US-Iran Ceasefire Triggers Major Rally

Key Market Movements

US equities posted substantial gains Wednesday following a ceasefire agreement between the United States and Iran. The Dow Jones surged 1,325.46 points (+2.85%), the S&P 500 rose 2.51%, and the Nasdaq climbed 2.9%. The rally extended globally, with European markets also posting strong gains.

Ceasefire Details

President Trump announced a two-week suspension of military action against Iran to allow negotiations based on a 10-point Iranian proposal. Iran's Supreme National Security Council agreed to reopen the Strait of Hormuz—a critical passage for one-fifth of global oil flows—contingent on cessation of hostilities. However, Iran's parliamentary speaker claimed the US had already violated the ceasefire, highlighting fragile trust between parties.

Oil Market Impact

Crude prices plummeted in their steepest decline since April 2020. West Texas Intermediate fell over 16% to $94.41 per barrel, while Brent crude dropped approximately 13% to $94.75. The decline reflects expectations of resumed energy flows through Hormuz, though ship traffic remains below pre-conflict levels.

Sector Performance

Cyclical stocks led gains, particularly those sensitive to energy costs. The VanEck Semiconductor ETF jumped 5%+, with Broadcom rising over 5% and Micron gaining 7%+. Meta surged 6.5% after unveiling its Muse Spark AI model. Travel, leisure, airlines, and homebuilders also rebounded strongly. The CBOE Volatility Index fell to its lowest level since conflict began.

Outlook

While investor sentiment improved significantly, analysts warn volatility may persist as the ceasefire remains fragile and geopolitical risks continue evolving.