US stock futures surged on Tuesday evening following a significant announcement concerning a two-week ceasefire between the US-Israel coalition and Iran. The news, shared by former President Donald Trump via his social media platform Truth Social, has sparked optimism in the markets. Futures contracts linked to the S&P 500 rose by 1.9%, while Nasdaq 100 futures experienced an uptick of 2.2%. The Dow Jones Industrial Average futures jumped approximately 1.8%.
Earlier in the day, the equities market closed mostly unchanged. The S&P 500 edged up by a modest 0.1%, and the Nasdaq Composite mirrored that increase. However, the Dow Jones Industrial Average declined by 85 points, or 0.2%, before the late-session news led to a rally.
The announcement from Trump included a commitment to suspend bombing and attacks on Iran, stating, “I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double-sided CEASEFIRE!” The former president also called for the immediate reopening of the strategic Strait of Hormuz.
In response to the ceasefire call, Iran issued a statement indicating that if assaults on its territory ceased, its military would halt defensive operations as well. Tehran proposed that for the two-week period, safe passage through the Strait of Hormuz would be possible, provided it was coordinated with Iran’s Armed Forces and adhered to any necessary technical limitations.
The announcement of the ceasefire had immediate consequences on oil prices. Brent crude futures plummeted 16% in after-hours trading, settling around $91 per barrel. Meanwhile, West Texas Intermediate crude saw a similar drop of approximately 16%, trading just above $94 per barrel.
In a dramatic prelude to the ceasefire arrangements, Trump had set an 8 p.m. ET deadline for Iran to agree to open the waterway, warning in a post on Truth Social, “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will,” if an agreement wasn’t reached.
Looking ahead in the corporate sector, Delta Air Lines is poised to report its earnings ahead of Wednesday’s trading session, which will be closely monitored by investors in light of the current geopolitical developments.
