By Purvi Agarwal and Avinash P.
April 8 (Reuters) – Wall Street’s main indexes rose to near one-month highs on Wednesday after the United States and Iran agreed to a two-week ceasefire, sending crude oil prices lower on expectations that energy supplies through the Strait of Hormuz could resume.
The announcement came hours before US President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz, and a senior Iranian official said the passage could open this week ahead of peace talks if the countries agreed to a framework for the ceasefire.
However, there was some alarm as fighting continued to rage across the region, with attacks on Lebanon and Iran’s neighbors.
Global markets, which had been reeling under mixed signals for weeks, staged a rally, with Asian and European stocks rising while crude oil prices fell below $100 a barrel.
“While there is still uncertainty about how long this ceasefire will last, stocks may rise even without all the details being worked out…just the smell of tensions melting is enough,” said Robert Edwards, chief investment officer at Edwards Asset Management.
At 11:30 a.m. ET, the Dow Jones Industrial Average rose 1,084.78 points, or 2.33%, to 47,669.24, the S&P 500 gained 140.76 points, or 2.13%, to 6,757.61 and the Nasdaq Composite gained 563.74 points, or 2.56%. to 22,581.59.
The Russell 2000 small-cap index jumped 2.8% to a more than one-month high, while the CBOE Volatility Index fell 4.50 points to 21.28, after hitting its lowest point since February 27.
The energy sector of the S&P 500 was the only one in the red, with a drop of almost 4.6%. Exxon Mobil and Chevron each fell 5.6%, and Occidental Petroleum lost 6.4%.
Travel stocks rose, with Southwest Airlines and United Airlines advancing 7.2% and 9.8%, respectively. ‌They boosted industrial stocks in the S&P 500 by 3.5%, the biggest gainers among other sectors.
Cruise operators Carnival and Norwegian Cruise Line added 10.8% and 8.7%, respectively.
The S&P 500 technology index rose 2.6%, helped by chip-linked stocks. The Philadelphia SE Semiconductor index briefly hit an all-time high and was last up 5.3%.
“When you’re looking to put money back to work, you’re looking for stocks that didn’t tank at all and some bigger ones like AMD held up relatively well,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The Dow Jones was boosted by gains from Goldman Sachs and American Express.
Investors are awaiting domestic inflation readings, expected later this week, to assess whether high wartime oil prices have increased price pressures.