U.S. stocks climbed on Thursday, with the Nasdaq Composite surging nearly 2%, the S&P 500 rising 1.1% and the Dow Jones Industrial Average adding about 0.3% as traders welcomed an interim U.S.-Iran peace deal that took pressure off oil and gave Wall Street a reason to buy.
The deal, signed by Trump and his Iranian counterpart on Wednesday, reopened the Strait of Hormuz to commercial traffic and went into effect as the U.S. removed its naval blockade in the region. Trump then told followers on Truth Social that oil was down and that the stock market had hit a record high, a message that matched the day’s move even as Brent crude hovered around $79 a barrel and West Texas Intermediate stayed above $75.
Thursday mattered because it was the last day of trading before the Juneteenth holiday, and investors had just absorbed the Federal Reserve’s decision to stand pat on policy a day earlier. That should have steadied markets, but more Federal Reserve officials also signaled a hike is on the table for later this year, leaving traders to weigh lower geopolitical risk against the chance that borrowing costs could still rise.
The market’s relief did not erase the other pressures building underneath it. Initial jobless claims came in slightly hotter than estimates on Thursday, though they cooled over the prior week, and chip stocks surged as the AI trade marched forward, with Intel jumping 11% after Trump posted that Apple had agreed to work with Intel to build its processors. Oil had already been giving back much of its war-time gains in recent weeks, so the peace announcement accelerated a move that was already underway.
What comes next is less about the headline and more about whether the calm holds for the next 60 days. Negotiations on more protracted issues, including Tehran’s nuclear program, are expected in that window, and that is where the real test begins for a market that has already started to price in both cheaper oil and a Federal Reserve that may not be done tightening.
