WASHINGTON (dpa-AFX) - Stocks moved sharply higher at the start of trading on Wednesday and continued to turn in a strong performance throughout the session. With the surge, the major averages ended the day at their best closing levels in about a month.
The major averages all showed substantial moves to the upside after ending Tuesday's trading narrowly mixed. The Dow spiked 1,325.46 points or 2.9 percent to 47,909.92, the Nasdaq surged 617.15 points or 2.8 percent to 22,635.00 and the S&P 500 shot up 165.96 points or 2.5 percent to 6,782.81.
The initial surge on Wall Street came in reaction to news that the U.S., Israel and Iran have agreed to a two-week ceasefire.
In a Truth Social post Tuesday evening, President Donald Trump said he has agreed to suspend the bombing and attack of Iran for a period of two weeks subject to Tehran agreeing to the complete, immediate and safe opening of the Strait of Hormuz.
Trump said the U.S. has received a 10-point proposal from Iran that he believes is a 'workable basis on which to negotiate' and said the two-week ceasefire will allow the agreement to be finalized and consummated.
A subsequent statement from Iran's Foreign Minister Abbas Araghchi indicated the Strait of Hormuz will be reopened for a period of two weeks if the attacks against Iran are halted.
The news has contributed to a nosedive by the price of crude oil, with U.S. crude oil futures plunging by more than 15 percent and dropping well below $100 a barrel.
'The positive market reaction is understandable as a two-week ceasefire raises hope for a complete end to the conflict,' said Dan Coatsworth, head of markets at AJ Bell.
'The ceasefire gives the world a moment to breathe and take stock of events,' he added. 'Unfortunately, there is no guarantee that everything will return to normal.'
Sector News
Airline stocks turned in some of the market's best performances on the day, with the NYSE Arca Airline Index soaring by 7.3 percent to its best closing level in a month.
Substantial strength was also visible among semiconductor stocks, as reflected by the 6.3 percent spike by the Philadelphia Semiconductor Index.
Networking stocks also showed a significant move to the upside, driving the NYSE Arca Networking Index up by 5.3 percent.
Housing, computer hardware and financial stocks also saw considerable strength, while oil producer and natural gas stocks bucked the uptrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Wednesday. Japan's Nikkei 225 Index soared by 5.4 percent, while China's Shanghai Composite Index shot up by 2.7 percent.
The major European markets also showed substantial moves to the upside on the day. The German DAX Index spiked by 5.1 percent, the French CAC 40 Index surged by 4.5 percent and the U.K.'s FTSE 100 Index jumped by 2.5 percent.
In the bond market, treasuries gave back ground after an initial surge but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.2 basis points to 4.291 percent after hitting a low of 4.234 percent.
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