U.S. stocks ended sharply higher on Wednesday, with investors’ sentiment getting a boost as President Donald Trump halted attacks on Iran, following the announcement of a two-week ceasefire that also signaled the reopening of the Strait of Hormuz. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 2.9% or 1,325.96 points, to end at 47,909.92 points.
The S&P 500 advanced 2.5%, or 165.98 points, to finish at 6,782.83 points. Industrial stocks were the biggest gainers, while energy stocks were the worst performers.
The Industrials Select Sector SPDR (XLI) gained 3.8%. The Materials Select Sector SPDR (XLB) gained 3.3%. The Information Technology Select Sector SPDR (XLK) added 3.1%. The Energy Select Sector SPDR (XLE) declined 3.5%. Ten out of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 2.8%, or 617.15 points, to close at 22,635 points.
The fear gauge, CBOE Volatility Index (VIX), was up 2.47% to 21.56. Advancers outnumbered decliners on the NYSE by a 5.67-to-1 ratio. On the Nasdaq, a 3.05-1 ratio favored advancing issues. A total of 20.64 billion shares were traded on Wednesday, higher than the last 20-session average of 19.42 billion.
On the NYSE, there were 197 new 52-week highs and 45 new lows. On the Nasdaq, there were 3,582 new highs and 1,174 new lows. On the S&P 500, there were 21 new 52-week highs and five new lows.
Wall Street Rallies After Ceasefire Announcement
All three major indexes jumped on Wednesday, triggering a broader market rally as investors felt a sigh of relief after Pakistan brokered a deal that resulted in a two-week ceasefire to the Iran war that began on Feb. 28.
Trump said that the two-week ceasefire will also see the reopening of the Strait of Hormuz. Iran’s foreign ministry added that the Strait of Hormuz will remain open for two weeks, provided the attacks are halted. However, the foreign ministry also said that ships passing through the passage would need to coordinate with Iran’s Armed Forces.
Stocks got a further boost in the afternoon, with the S&P 500 surpassing its 200-day moving average, after Trump posted that the United States and Iran are discussing tariffs and sanction relief and will coordinate and remove nuclear material from the nation.
Oil prices fell sharply on Wednesday. West Texas Intermediate crude futures plunged over 16% to settle at $94.41 per barrel, marking their steepest single-day decline since April 2020. Shares of energy companies that had surged due to the conflict retreated from their highs. Shares of Exxon Mobil Corporation (XOM) declined 4.7%, while Chevron Corporation (CVX) fell 4.3%.
However, stocks that had been suffering due to the war rebounded. Semiconductor stocks were the biggest gainers, with Broadcom, Inc. (AVGO) jumping 5%. Broadcom sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Minutes From FOMC Meeting Released
The minutes from the Federal Reserve’s last FOMC meeting showed that policymakers are now more inclined toward rate hikes as they fear that the ongoing war could trigger inflation, as oil prices continue to remain high.
No major economic data was released on Wednesday.
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