U.S. stock futures surged early Wednesday after President Donald Trump announced a two-week suspension of attacks on Iran just ahead of his 8 p.m. ET deadline, pausing a five-week conflict that had disrupted a key global energy route and shaken equity markets.
Futures linked to the Dow Jones Industrial Average jumped more than 1,000 points, or 2.29%. S&P 500 futures gained 2.52%, while Nasdaq 100 futures advanced 3.2%.
Oil prices dropped sharply following the announcement. West Texas Intermediate crude fell about 14% to $97.17 per barrel, while Brent crude for June delivery declined over 12% to $95.55 per barrel.
In a post, Trump stated that he had agreed to halt attacks on Iran for two weeks, citing a 10-point proposal from Tehran as a potential basis for negotiations. He added that the ceasefire would depend on Iran reopening the Strait of Hormuz.
Iran’s Supreme National Security Council reportedly agreed to reopen the waterway for the same period, provided all hostilities cease. The move would require coordination with Iran’s Armed Forces. Israel has also reportedly agreed to the ceasefire.
During Tuesday’s regular session, the S&P 500 edged up 0.08% as traders anticipated a possible de-escalation. The Nasdaq Composite rose 0.10%, while the Dow Jones Industrial Average slipped by 85 points.
Markets recovered late in the session after Pakistan’s Prime Minister Shehbaz Sharif urged Trump to delay potential strikes and called on Iran to reopen the Strait of Hormuz as a goodwill gesture.
Earlier, Trump had set a deadline for Iran to reach an agreement, warning of strikes on key infrastructure if demands were not met. The ongoing tensions had weighed heavily on markets, leaving the S&P 500 about 5.5% below its all-time high, after nearly entering correction territory last month.
Oil prices have risen more than 70% this year due to the Strait’s closure, pushing U.S. gasoline prices above $4 per gallon for the first time since 2022.
Meanwhile, Delta Air Lines is scheduled to report earnings before Wednesday’s opening bell.
