Stock Market Today: S&P 500, Dow Rally as Trump Announces Ceasefire

U.S. stock futures moved sharply higher on Wednesday after President Donald Trump announced a two-week ceasefire with Iran. The update eased immediate concerns about a wider conflict in the Middle East and pushed oil prices lower, helping risk appetite recover across global markets. S&P 500 futures rose more than 2%, while Dow and Nasdaq 100 futures also posted strong premarket gains.

The rally followed several weeks of pressure tied to the conflict, rising energy costs, and uncertainty around inflation and Federal Reserve policy.

Stock Market Today Tracks Relief Across Equities

The stock market opened with a strong rebound as the ceasefire announcement reduced near-term fears around the Strait of Hormuz, a key route for global oil shipments. U.S. stock index futures climbed more than 2%, while Asian and European markets also advanced as traders responded to a lower risk of immediate supply disruption.

Treasury yields moved lower as the pullback in crude improved the inflation outlook. The two-year Treasury yield traded near 3.72%, while the 10-year yield moved around 4.24%. The move reflected renewed expectations that the Federal Reserve may have more room to cut rates later this year if price pressures continue to cool

Markets also stayed focused on upcoming policy signals from the Fed. Traders continued to price in a high probability that rates will remain unchanged at the next meeting, while expectations for a year-end cut increased after the ceasefire announcement. 

Recently, market sentiment weakened after the Federal Reserve kept its benchmark interest rate unchanged at 3.5% to 3.75%, signaling that borrowing costs may stay elevated for longer. The central bank also said inflation still needs to show clearer progress before any rate cuts can begin. 

Oil Price Moves Drive Market Reaction

Oil prices recorded one of the sharpest declines in recent years following the ceasefire announcement. West Texas Intermediate crude dropped as much as 19% during the session, while Brent crude fell toward the mid-$90 range per barrel. The move came as traders reassessed the risk of supply disruptions in the Middle East.

The Strait of Hormuz remains a critical route for global energy shipments, and the ceasefire reduced fears of immediate disruptions. The agreement created expectations that oil flows could stabilize during the two-week pause, easing pressure that had built during the conflict.

The drop in crude prices also influenced broader financial markets. Lower energy costs supported equities by reducing inflation expectations and improving the outlook for consumer spending and corporate margins. Bond markets reacted in parallel, with yields moving lower as inflation risks moderated.

Despite the decline, oil markets remained sensitive to further developments. The ceasefire is temporary, and uncertainty around long-term stability continues to influence pricing.