US Stocks Soar On US-Iran Ceasefire

NEW YORK, April 9 (Bernama-Xinhua) -- US stocks surged on Wednesday after the United States announced a two-week ceasefire with Iran, easing geopolitical tensions and triggering a sharp drop in oil prices, reported Xinhua.

The Dow Jones Industrial Average rose 2.85 per cent to 47,909.92. The S&P 500 added 2.51 per cent to 6,782.81. The Nasdaq Composite Index increased 2.8 per cent to 22,635.

Ten of the 11 primary S&P 500 sectors closed higher, led by industrials and communication services with gains of 3.75 per cent and 3.44 per cent, respectively. Energy was the only declining sector, falling 3.66 per cent.

Stocks rallied strongly as investors welcomed the temporary de-escalation of the over-five-week conflict that had disrupted the Strait of Hormuz.

West Texas Intermediate crude futures for May delivery plunged more than 16 per cent to close above US$94 per barrel, recording its largest daily drop since April 2020. The international Brent crude benchmark for June delivery fell to settle at nearly US$95 per barrel.

A new analysis by the Dallas Federal Reserve suggested that inflation expectations could ease quickly if the Strait of Hormuz reopens, indicating that the oil shock's long-term impact on prices may be limited.

However, Wood Mackenzie, an international energy consultancy, said on Wednesday that oil and gas production in the Middle East faces a "months-long" process toward normalisation, even with a ceasefire deal in place.

"A 'workable system' of transit and shipowner confidence in the security of the transiting vessels is essential," said Alan Gelder, senior vice president of refining, chemicals and oil markets with Wood Mackenzie. "Ballasting vessels are unlikely to enter via the Strait of Hormuz any sooner than a 'just in time' logistics basis, at risk of becoming trapped if hostilities resume."

--BERNAMA-XINHUA