(NEW YORK) — Stocks soared and oil prices plunged in early trading on Wednesday, just hours after the U.S. and Iran announced a two-week ceasefire.
The Dow Jones Industrial average surged 1,215 points, or 2.6%, while the S&P 500 climbed 2.5%. The tech-heavy Nasdaq jumped 3.4%.
As part of the accord, Iran says it will allow tankers passage through the Strait of Hormuz, a vital shipping route for oil and gas, as long as they coordinate with the nation’s military. Investors appeared optimistic that the agreement would ease one of the worst global oil shortages in decades.
U.S. oil prices plummeted 18% on Wednesday, registering at about $92 a barrel. Still, the price of oil remained well above pre-war levels of about $67 a barrel.
President Donald Trump touted the ceasefire in a social media post on Wednesday, saying there would be “no enrichment of Uranium,” despite the Iranians claiming that the U.S. agreed to its plan, which includes numerous concessions.
The president added that “the United States will, working with Iran, dig up and remove all of the deeply buried (B-2 Bombers) Nuclear ‘Dust.'”
The Iranian Supreme National Security Council’s statement on Tuesday included “acceptance of enrichment” in its 10-point plan.
Investors will likely pay close attention to a potential uptick in tanker traffic through the Strait of Hormuz.
Typically, scores of ships carry a fifth of the world’s oil through the strait each day, but Iran effectively closed the passage over the course of the war. That oil shortage sent crude prices soaring, and it threatened far-reaching price increases that some economists feared could tip the U.S. economy into a recession.
ABC News’ David Brennan, Jon Haworth and Nadine El-Bawab contributed to this report.
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