U.S. Stocks End Wednesday on High Note

(MENAFN) Wall Street surged Wednesday as investors cheered a landmark two-week truce between Washington and Tehran, sending all three major indices sharply higher and driving a dramatic retreat in market anxiety.

The New York Stock Exchange closed the session with broad-based gains. The Dow Jones Industrial Average advanced 2.85%, adding 1,325.46 points to finish at 47,909.92. The S&P 500 climbed 2.51%, or 165.96 points, to settle at 6,782.81, while the Nasdaq Composite gained 2.8%, rising 617.14 points to close at 22,634.99.

The Volatility Index (VIX) — widely known as the "fear index" — cratered 18.39% to 21.04, its lowest reading in more than a month, reflecting a sharp pullback in investor uncertainty.

The rally followed President Donald Trump's Tuesday announcement that Washington had accepted a ceasefire, bringing a pause to weeks of escalating hostilities that erupted on Feb. 28 with US and Israeli strikes against Iran, and subsequently widened as Tehran retaliated and strikes spread across multiple countries in the region. Trump said the agreement was contingent on the reopening of the Strait of Hormuz, and disclosed that Washington had received a 10-point proposal from Iran that could serve as a workable basis for negotiations.

Iran's Supreme National Security Council declared that Tehran had fulfilled its wartime objectives, with final negotiations expected to wrap up in Islamabad within 15 days.

Energy markets moved sharply in the opposite direction. US West Texas Intermediate (WTI) futures dropped 14.5% to $96.52 a barrel as of 2035 GMT, while international benchmark Brent crude fell 12% to $96.20.

The ceasefire announcement also drew attention to the Federal Reserve's latest meeting minutes, which revealed that policymakers flagged the Iran conflict as a source of competing pressures on US monetary policy. Prolonged oil price increases could necessitate interest rate hikes, officials noted, while a deteriorating labor market might instead call for cuts. Policymakers agreed it was premature to gauge the full economic fallout and pledged to remain "nimble" in assessing the policy path. Several participants cautioned that inflation could stay elevated longer than anticipated if energy prices remained high — a scenario that could demand tighter monetary conditions.

European Markets
The optimism swept across the Atlantic, with European equities posting some of their strongest single-session gains of the year.

The pan-European Stoxx Europe 600 index surged 3.88% to close at 613.5 points. Germany's DAX 40 led regional gains, jumping 5.06% to 24,080.63. France's CAC 40 rose 4.49% to 8,263.87, and Spain's IBEX 35 climbed 3.94% to 18,132.30. Italy's FTSE MIB 30 added 3.7% to 47,091.55, while Britain's FTSE 100 gained 2.51% to reach 10,608.88.

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