U.S. stock futures jumped Wednesday after President Donald Trump said he was suspending Iran attacks for two weeks just ahead of his 8 p.m. ET deadline, pausing a five-week conflict that closed a crucial waterway for global energy supply and sent equity prices reeling.
Futures tied to the Dow Jones Industrial Average rose by 1,248 points, or 2.7%, by 8:47 a.m. E.T. S&P 500 futures added 2.7%, and Nasdaq 100 futures climbed 3.5%.
West Texas Intermediate crude futures tumbled more than 16% to $94.41 a barrel following Trump’s declaration. International benchmark Brent for June delivery lost more than 14% to $93.67 per barrel.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump posted on Truth Social. “We received a 10-point proposal from Iran, and believe it is a workable basis on which to negotiate.”
Trump noted that the “double sided” ceasefire was contingent on Iran agreeing to an opening of the Strait of Hormuz.
Iran’s Supreme National Security Council has agreed to reopen the waterway for two weeks as long as all attacks are halted, according to a statement from Iran’s Foreign Minister. The statement said transit would need to be coordinated with Iran’s Armed Forces. Israel agreed to the ceasefire as well, according to media reports.
“It wasn’t much of a surprise that there was an announced reprieve in the Iranian conflict. The market has gotten much better at sniffing out” Trump’s next move, said Jay Woods, chief market strategist for Freedom Capital Markets. “The concern now is if this all too familiar ‘two-week’ timeframe is going to lead to a resolution.”
Stock futures added to their gains after Trump posted Wednesday morning that the U.S. will be working with Iran to remove nuclear material from the country and that the two nations are discussing tariff and sanctions relief for Iran.
Stocks that have been under pressure this year rallied in premarket trading, with the megacaps Nvidia and Amazon jumping more than 3% and 4%, respectively. Tesla shares advanced more than 4%. Shares of JPMorgan and Boeing climbed more than 2% and 3%, respectively.
On the other hand, energy stocks that have surged since the start of the conflict faltered in the premarket, with shares of Exxon Mobil dropping more than 6% and Chevron down more than 4%.
Investors are coming off a mixed session Tuesday, with the S&P 500 eking out a gain of 0.08% as traders bet that a ceasefire could be achieved. The Nasdaq Composite inched 0.10% higher on Tuesday, while the Dow lost 85.42 points.
Stocks came off their session lows in the final hour of Tuesday’s trading session after Pakistan’s Prime Minister Shehbaz Sharif asked Trump to extend by two weeks his deadline for striking Iran’s bridges and power plants. In a post on social media platform X, Sharif also requested Tehran open the Strait of Hormuz for two weeks “as a goodwill gesture.”
Trump had previously set a deadline for 8 p.m. ET Tuesday for Iran to reach a deal with the U.S. to reopen the key waterway. He threatened to attack the nation’s power plants and bridges, as well as wipe out its “whole civilization,” if such terms were not met.
The S&P 500 was 5.5% below the all-time high reached earlier this year at Tuesday’s close. The benchmark neared a 10% correction in March before rebounding on optimism Trump would find an off-ramp to ease the havoc the conflict was wreaking on markets.
Crude oil prices are up more than 70% this year because of the closure of the Strait of Hormuz, pushing the average U.S. national gasoline price tracked by AAA above $4 a gallon for the first time since 2022.