United States equity futures surged on Tuesday evening (Wednesday AEST) after Donald Trump announced a two-week suspension of planned attacks on Iran, fuelling hopes for a diplomatic resolution to the five-week conflict that has disrupted global energy markets.
By 9:25 am AEST (11:25 pm GMT), futures tied to the Dow Jones Industrial Average rose 1.9%, while S&P 500 futures gained 2.1% and Nasdaq-100 futures climbed 2.4%.
Oil prices tumbled sharply following the announcement, with West Texas Intermediate crude futures plunging 18.7% to US$91.71 per barrel.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump posted on Truth Social. “We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate.”
Trump added that the proposed “double sided” ceasefire would depend on Iran reopening the Strait of Hormuz.
Iran’s Supreme National Security Council has agreed to enter negotiations with the United States in Pakistan for a two-week period, according to Iranian state media. Israel has also agreed to the ceasefire, according to reports.
During the regular trading session, U.S. equities delivered a mixed performance. The Dow Jones Industrial Average fell 0.2%, while the S&P 500 and Nasdaq Composite each edged 0.1% higher.
Stocks recovered from earlier losses late in Tuesday’s session after Shehbaz Sharif urged Trump to delay military action by two weeks. In a post on X, Sharif also called on Tehran to reopen the Strait of Hormuz for the same period “as a goodwill gesture”.
Trump had previously set an 8 pm ET deadline for Iran to reach an agreement to reopen the waterway, warning of strikes on key infrastructure, including power plants and bridges, if terms were not met.
Looking ahead, investors will turn their attention to upcoming corporate earnings, with Delta Air Lines scheduled to report results before Wednesday’s opening bell (Thursday AEST).
