Ankara: The New York Stock Exchange closed the third trading day of the week with sharp gains after Washington and Tehran agreed to a two-week ceasefire.
According to Anadolu Agency, the Dow added 2.85%, or 1,325.46 points, to close at 47,909.92. The Nasdaq composite rose 2.8%, or 617.14 points, to 22,634.99, while the S and P 500 climbed 2.51%, or 165.96 points, to 6,782.81. The Volatility Index (VIX), often referred to as the 'fear index,' plunged 18.39% to 21.04, marking its lowest level in over a month.
The ceasefire comes after weeks of escalating conflict initiated by US and Israeli strikes against Iran on February 28, leading to an Iranian retaliation and attacks on multiple countries in the region. US President Donald Trump announced on Tuesday that the US had agreed to a ceasefire on the condition that the Strait of Hormuz be reopened. Washington received a 10-point proposal from Iran, which could serve as a basis for further negotiations.
Iran's Supreme National Security Council stated that Tehran had achieved its wartime objectives, with final negotiations expected to conclude in Islamabad within no more than 15 days. The announcement of the ceasefire led to a significant drop in oil prices. US West Texas Intermediate (WTI) futures fell 14.5% to $96.52 a barrel, while international benchmark Brent crude futures decreased by 12% to $96.20.
The minutes from the last Federal Reserve meeting indicated that officials acknowledged the Iran conflict could create competing risks for US monetary policy. Persistent oil-price increases might necessitate rate hikes, while a weaker labor market could call for additional rate cuts. Policymakers agreed it was too early to determine the full impact of Middle Eastern developments on the US economy but stressed the need to remain adaptable in assessing the policy path. There is a risk that inflation could stay elevated if oil prices remain high, a scenario that may require stricter monetary measures.
European markets also experienced significant increases, with the pan-European Stoxx Europe 600 index gaining 3.88% to close at 613.5 points. Germany's DAX 40 rose 5.06% to 24,080.63, and Britain's FTSE 100 advanced 2.51% to 10,608.88. Italy's FTSE MIB 30 saw a rise of 3.7% to 47,091.55, while France's CAC 40 gained 4.49% to 8,263.87. Spain's IBEX 35 increased by 3.94% to 18,132.30 points.