US stock futures jumped on Tuesday, while oil prices slumped after Israel confirmed it has agreed a US-brokered ceasefire with Iran, boosting hopes for a more permanent end to their conflict.
Dow Jones Industrial Average futures (YM=F) surged 0.6%, while those on the S&P 500 (ES=F) moved up roughly 0.8%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the advance, up 1%.
A relief rally is under way as hopes build for a lasting end to a 12-day-old conflict that has spooked markets with its risks of squeezed oil supply and escalation into full-blown war. On Monday, US stocks rose as Iran’s response to US attacks signaled a desire to deescalate tensions.
President Trump said the pause in hostilities has begun, after Israel confirmed it had agreed to the “complete and total” truce announced by the US leader late on Monday.
“THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT!” Trump wrote on social media early on Tuesday morning.
Oil prices fell sharply as the ceasefire further eased worries about disruption to supply of crude, centered on the risk that Iran would block the key Strait of Hormuz conduit for tankers.
At one point, Brent crude futures (BZ=F) dipped below their level just before Israel’s strikes on Iran’s nuclear sites almost two weeks ago. Brent was last trading over 3% lower near $68 per barrel, while West Texas Intermediate (CL=F) also fell to hover at around $66 per barrel.
On Tuesday, Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee, where he will deliver prepared remarks on monetary policy and hold question-and-answer sessions with lawmakers. Carnival Corporation (CCL), FedEx (FDX), BlackBerry (BB) are also due to report earnings.
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