Wall Street ends sharply higher on US-Iran ceasefire

US stocks have closed sharply higher after a last-minute two-week ceasefire agreement between the United States and Iran lifted investor sentiment. All three major US stock indices surged at the opening bell, muscled higher by a broad relief rally after a deal brokered by Pakistan resulted in a two-week suspension of the war. The conflict, which began with joint US-Israeli strikes on Iran on February 28, has sent world markets reeling, disrupted global oil supply and sparked fears of rising inflation. A senior Iranian official told Reuters that the crucial Strait of Hormuz, through which one-fifth of the world's oil is shipped, could be reopened on Thursday or Friday ahead of peace talks if the countries agreed upon a framework for the ceasefire. "It's an expected move today and there's still a lot of work to do but I think the market is quite relieved," said Mike Dickson, head of portfolio management at Horizon Investments in Charlotte, North Carolina. "The other side of this coin could have been a lot worse and frankly there's a good reason to think that it was possible too. So you're seeing that relief rally in the hardest-hit areas of the market." The S&P 500 shot above its 200-day moving average for the first time since mid-March while the Dow registered its largest single-session percentage gain since April 9, 2025. Economically sensitive Dow Transports touched an all-time high while the Russell 2000 outperformed its larger-cap peers. Chips jumped 6.3 per cent. The rally was not confined to US indexes. European shares rose 3.9 per cent while MSCI's World index was up more than 3.0 per cent. Both indices logged their biggest one-day percentage gains in a year. "Most other countries were more exposed to an energy shock and a food shock than the US," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "So this is a much bigger near-term relief for international stocks." The CBOE Market Volatility index, a barometer of investor anxiety, dipped to its lowest level since the beginning of the war. Front-month WTI and Brent crude futures fell 16.4 per cent and 13.3 per cent respectively, both settling below $US100 per barrel. Minutes from the US Federal Reserve's March meeting, released on Wednesday, showed a growing openness to rate hikes as policy makers raised their 2026 inflation outlook due to war-related oil shock. The Dow Jones Industrial Average rose 1,326.33 points, or 2.85 per cent, to 47,910.79, the S&P 500 gained 165.98 points, or 2.51 per cent, to 6,782.83 and the Nasdaq Composite gained 617.15 points, or 2.80 per cent, to 22,635.00. Of the 11 major sectors in the S&P 500, eight jumped 2.0 per cent or more, with industrials leading the pack. Energy stocks, dragged down by falling crude prices, were the sole percentage losers, dropping 3.7 per cent. Sectors that have suffered a beating since the war began enjoyed a robust bounceback. Commercial airlines jumped 5.7 per cent, travel and leisure-related stocks shot up 5.2 per cent and homebuilders rose 4.9 per cent. Delta Air Lines gained 3.8 per cent despite its disappointing second-quarter profit forecast. The commercial air carrier declined to update its annual outlook due to uncertainties related to the Iran war. Delta peers Southwest Airlines and United Airlines advanced 6.7 per cent and 7.9 per cent respectively. Cruise operator Carnival added 11.2 per cent and Norwegian Cruise Line rose by 7.6 per cent. Levi Strauss jumped 10.7 per cent after the apparel maker raised its annual sales and profit forecasts. Advancing issues outnumbered decliners by a 5.67-to-1 ratio on the NYSE. There were 197 new highs and 45 new lows on the NYSE. On the Nasdaq, 3,582 stocks rose and 1,174 fell as advancing issues outnumbered decliners by a 3.05-to-1 ratio. The S&P 500 posted 21 new 52-week highs and 5 new lows while the Nasdaq Composite recorded 133 new highs and 57 new lows. Volume on US exchanges was 20.64 billion shares, compared with the 19.42 billion average for the full session over the last 20 trading days.