WASHINGTON (dpa-AFX) - Following the weakness seen over the two previous sessions, stocks have shown a strong move back to the upside during trading on Wednesday. The tech-heavy Nasdaq has led the way higher, more than offsetting the two-day pullback to reach a new record intraday high.
Currently, the major averages are off their highs of the session but still firmly positive. The Nasdaq is up 272.17 points or 1.1 percent at 24,532.14, the S&P 500 is up 56.42 points or 0.8 percent at 7,120.43 and the Dow is up 360.19 points or 0.7 percent at 49,509.57.
The notable rebound on Wall Street comes in reaction to news that President Donald Trump has extended the U.S. ceasefire with Iran.
Calling Iran's government 'seriously fractured,' Trump said in a post on Truth Social that the U.S. would hold off on attacking Iran until their leaders 'come up with a unified proposal.'
However, Trump also said that he has directed the U.S. military to continue its blockade of all maritime traffic entering and exiting Iranian ports.
Iran dismissed Trump's ceasefire extension as 'meaningless' and said the Strait of Hormuz will remain closed until the U.S. blockade is lifted.
Mahdi Mohammadi, a senior adviser to Iranian Parliament Speaker Mohammad Bagher Ghalibaf, termed the ceasefire extension a ploy 'to buy time for a surprise strike,' adding the 'losing side cannot dictate terms.'
Shortly after Trump's ceasefire announcement, Iran's Revolutionary Guard Navy claimed it has seized two container ships in Strait of Hormuz for 'maritime violations.'
The back and forth between Trump and Tehran has led to some uncertainty, although traders generally remain hopeful about an eventual resolution of the conflict.
Traders also continue to express optimism about the strength of corporate results, with earnings season off to a solid start.
'Investors appear to be focusing more on the direction of risk - whether things are improving or deteriorating - rather than the absolute level of geopolitical tension,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
'Earnings season is playing a key role in reinforcing this narrative,' she added. 'Expectations for continued double-digit earnings growth remain intact, helping to justify elevated equity valuations even as macro risks persist.'
Sector News
Gold stocks are showing a significant rebound after falling sharply in the previous session, with the NYSE Arca Gold Bugs Index surging by 2 percent after plummeting by 6.4 percent on Tuesday.
A sharp increase by the price of crude oil is also contributing to substantial strength among oil service stocks, resulting in a 2 percent jump by the Philadelphia Oil Service Index.
Computer hardware, software and semiconductor stocks are also seeing considerable strength, contributing to the advance by the tech-heavy Nasdaq.
On the other hand, airline stocks have moved sharply lower on the day, dragging the NYSE Arca Airline Index down by 2.4 percent.
United Airlines (UAL) is leading the sector lower, plunging 6.6 percent after reporting better than expected first quarter results but providing disappointing guidance.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1.2 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.7 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.2 percent.
In the bond market, treasuries are showing a lack of direction after moving notably lower in the previous session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.286 percent.
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