NEW YORK: US stocks closed sharply higher on Wednesday 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."
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