US stocks surged Wednesday as oil plunged in its biggest single-day decline since the pandemic, after President Trump said he had agreed to a two-week ceasefire with Iran including the reopening of the Strait of Hormuz.
The Dow Jones Industrial Average soared 1,325 points, or 2.9%, to 47,909.92 — the best day since April 2025. The S&P 500 and Nasdaq jumped 2.5% and 2.8%, respectively.
Brent crude oil prices dropped 13% to $96.31 a barrel – the lowest price in nearly a month after news that Iran would allow the temporary safe passage of ships through the strait, a vital maritime route for 20% of the world’s oil supply.
US stock futures surged Wednesday morning as oil plunged near $90 a barrel. REUTERSWest Texas Intermediate crude also fell 15% to $96.28 a barrel.
Investors ramped up their bets that Fed officials would issue at least one rate cut this year to 43% on Wednesday – up from 14% the previous day on hopes that global energy supplies would quickly normalize and avoid higher inflation.
Iran’s navy, however, on Wednesday threatened to attack any ships that attempt to traverse the strait without permission. The nation has also reportedly proposed charging some ships fees as high as $2 million for safe passage, which could further complicate the free flow of crude.
Meanwhile, energy experts told The Post it will likely take months for global energy supplies to stabilize even if the strait remains open.
President Trump said he had agreed to a two-week ceasefire with Iran. Anadolu via Getty Images“Even though there is still uncertainty over how durable this ceasefire is, stocks can still move higher even without all of the details ironed out,” Robert Edwards, chief investment officer at Edwards Asset Management, said in a note Wednesday.
“Just the scent of thawing tensions is enough for forward-looking stocks to keep climbing the wall of worry,” he added.
Ken Mahoney, CEO of Mahoney Asset Management, told The Post that Wednesday’s market rally “does present a situation where stocks will pull back and fill in some of this large gap up.”
“The real test comes in, how do we react if we start to pull back again? You want to see us eventually stabilize,” Mahoney said. “You do not want to see the market easily slice lower after this and begin to again create a series of lower highs.”
He said the next two to four weeks will be a pivotal moment in the markets, as some investors are fearful of a more intense correction and others believe this is the set-up for new all-time highs.
In a Tuesday evening Truth Social post, less than two hours before Trump’s deadline for Iran to reopen the strait or face a bombardment of its power plants and bridges, the president announced a “double sided” two-week ceasefire.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump wrote, adding that the ceasefire was subject to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”
“We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate,” he added.
Iran’s Supreme National Security Council said in a statement that it has agreed to reopen the strait for two weeks, though it emphasized it was not a full-fledged peace agreement. Israel also reportedly agreed to the ceasefire.
Traders are eager for the free flow of crude through the Persian Gulf to resume. REUTERSTrump wrote in a Wednesday morning Truth Social post that as part of the ceasefire, the US will work with Iran to “dig up and remove all of the deeply buried (B-2 Bombers) Nuclear ‘Dust’” – adding to market optimism.
Traders are eager for the free flow of crude through the Persian Gulf to resume – but analysts have warned that oil and gasoline prices could remain elevated, since it will take time and money to repair damages at Middle East energy facilities hit in air strikes.
