U.S. stocks surged on Wednesday after former President Donald Trump announced a temporary ceasefire agreement with Iran, easing fears of further Middle East conflict. The S&P 500 gained 1.8% while the Dow Jones Industrial Average rose 420 points in midday trading.
The rally followed Trump’s late-night statement that both sides had agreed to “pause hostilities” after weeks of escalating tensions. While details remain scarce, White House sources confirmed indirect negotiations through Swiss intermediaries.
“Markets are breathing a sigh of relief,” said Linda Thompson, senior strategist at Capital Economics. “But this looks more like a tactical pause than a lasting solution – energy sector investors should remain cautious.”
The gains were broad-based, though defense contractors Lockheed Martin and Raytheon dipped 3% on reduced conflict expectations. Oil prices fell 2% as supply disruption fears eased.
Analysts note the ceasefire remains fragile, with Tehran yet to confirm the agreement publicly. Any breakdown could trigger rapid market reversals.