The stock market made impressive gains on Tuesday as speculation about a possible conclusion to the U.S.-Iran war sparked enthusiasm on Wall Street.
The Dow Jones Industrial Average soared by 979 points, an increase of 2.2%, after initially climbing over 1,100 points due to rumors that Iranian President Masoud Pezeshkian might be willing to end the hostilities with certain assurances. The S&P 500 rose by 2.6%, while the Nasdaq Composite advanced by 3.6%.
However, investors remain cautious, recalling similar statements from Pezeshkian earlier this month when he declared on X that true peace required recognition of Iran’s rights, reparations, and strong international guarantees against future aggressions.
Optimism was further fueled by reports from The Wall Street Journal indicating that former President Donald Trump has expressed willingness to consider halting military operations, even if the Strait of Hormuz remains closed. The New York Post added that Trump feels the conflict could soon conclude, with other nations potentially stepping in to reopen crucial shipping routes.
Tech stocks, which have struggled amid the ongoing fighting, led the recovery. The Technology Select Sector SPDR Fund (XLK) saw an increase of nearly 2%, while Nvidia and Microsoft gained more than 3% and 1%, respectively.
“Any movement towards resolving the conflict is welcomed by the market, contributing to a relief rally,” said Eric Diton, president of The Wealth Alliance, although he cautioned that challenges remain.
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Despite the positive stock trends, oil markets remained hesitant.
Crude prices remained high after reports of an Iranian strike on a Kuwaiti oil tanker near Dubai, although no injuries were reported.
Brent crude futures increased by 5%, surpassing $118 per barrel, while West Texas Intermediate futures dropped slightly but still stayed above $101 per barrel.
