S&P Futures experienced a notable increase on Wednesday following President Donald Trump’s announcement of a two-week suspension of attacks on Iran, just before his 8 pm deadline. This development marks a pause in a five-week conflict that had disrupted a vital waterway for global energy supply and caused significant declines in equity prices. Futures associated with the Dow Jones Industrial Average experienced an increase of 1,229 points, representing a rise of 2.6%, by 6:47 am. Meanwhile, S&P 500 futures saw an uptick of 2.7%, and Nasdaq 100 futures advanced by 3.5%. West Texas Intermediate crude futures declined over 16% to $94.41 a barrel in the wake of Trump’s declaration. International benchmark Brent for June delivery declined by over 14% to $93.67 per barrel. “I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump stated on Truth Social. “We have obtained a 10-point proposal from Iran, which we consider to be a viable foundation for negotiations.”
Trump indicated that the “double sided” ceasefire depended on Iran consenting to an opening of the Strait of Hormuz. According to a statement from Iran’s Foreign Minister, Iran’s Supreme National Security Council has consented to the reopening of the waterway for a duration of two weeks, contingent upon the cessation of all attacks. The statement indicated that coordination with Iran’s Armed Forces would be necessary for transit operations. According to reports, Israel has also consented to the ceasefire. “The announcement of a reprieve in the Iranian conflict was not particularly surprising. The market has become significantly more adept at anticipating Trump’s next move, according to Jay Woods. “The prevailing issue at hand is whether this recurrent ‘two-week’ period will culminate in a resolution.”
During the regular session Tuesday, the S&P 500 recorded a modest gain of 0.08% as traders speculated on the potential for a ceasefire to be reached. The Nasdaq Composite experienced a modest increase of 0.10% on Tuesday, whereas the Dow declined by 85.42 points. Stocks recovered from their session lows in the final hour of Tuesday’s trading session following a request from Pakistan’s Prime Minister Shehbaz Sharif to Trump, seeking a two-week extension on the deadline for targeting Iran’s bridges and power plants. In a recent post on social media platform X, Sharif requested that Tehran open the Strait of Hormuz for two weeks “as a goodwill gesture.” Trump had earlier established a deadline of 8 pm on Tuesday for Iran to negotiate an agreement with the U.S. regarding the reopening of the critical waterway. He issued a threat to target the nation’s power plants and bridges, asserting that he would eliminate its “whole civilization” if the stipulated terms were not fulfilled.
At Tuesday’s close, the S&P 500 stood 5.5% beneath the all-time high achieved earlier this year. The benchmark approached a 10% correction in March prior to a rebound fueled by optimism that Trump would identify a solution to mitigate the turmoil the conflict was inflicting on markets. The increase in crude oil prices exceeding 70% this year can be attributed to the closure of the Strait of Hormuz, resulting in the average national gasoline price in the U.S., as monitored by AAA, surpassing $4 a gallon for the first time since 2022.