US stocks closed sharply higher on Wednesday as investors grew more confident that the two-week ceasefire between Iran and the US would hold. The White House said the US was prepared to engage in direct talks with Tehran, even as ongoing conflict in the Middle East — including Israeli strikes in Lebanon and Iranian strikes on Gulf states — threatened to undermine the truce.
The Dow Jones Industrial Average ended the session more than 1,300 points higher, up 2.85%, its strongest single-day gain since April 2025. The S&P 500 advanced 2.5%, while the Nasdaq Composite climbed 2.80%.
Oil prices dropped sharply and Treasury yields extended their recent decline, helping to revive risk appetite despite renewed warnings about stagflation risks in the latest FOMC minutes.
Speculative AI-related stocks led the advance, with Nvidia, Meta, Tesla, AMD, and Micron rallying between 4% and 10%. Airline shares also rose on the improved outlook for jet fuel supply, and Delta Air Lines jumped 6% after reporting earnings.
