- US stocks skyrocketed during Tuesday's trading session.
- Investor hopes for an end to the war in Iran were reignited by comments from Trump.
- Gains extended on reports that Iran's president is also open to ending the war.
US stock investors finally got what they've been waiting for: an apparent two-sided de-escalation of the Iran war.
All three major indexes ripped more than 2% higher on comments from the US and Iranian presidents signaling an end is in sight.
Tuesday's initial increase came after a Wall Street Journal report that President Trump would consider an end to the Iran war, even without a reopening of the Strait of Hormuz. The gains extended after Trump told the New York Post that the US is "not going to be there too much longer," adding that the Strait will open once the US withdraws.
The gains swelled even bigger in afternoon trading on unconfirmed reports that Iran's president Masoud Pezeshkian is open to ending the war.
The surge ends a difficult month for stocks on a positive note, although US indexes are still down sharply since the start of the war.
Here's where major indexes stood around 2 p.m. ET:
S&P 500: 6,496.48, up 2.4%
Dow Jones Industrial Average: 46,171.48, up 2.1% (+955 points)
Nasdaq Composite: 21,479.61, up 3.3%
The reaction in oil prices was split. WTI crude fell as much as 3% on the de-escalation headlines. Meanwhile, Brent crude continued its ascent towards $120 per barrel, climbing 5%.
The 10-year US Treasury yield fell four basis points to 4.3%. Yields have spiked as the war hits the one month mark reflecting expectations for higher inflation and higher interest rates driven by the conflict in the Middle East.
Marko Kolanovic, JPMorgan's former quant chief, highlighted the rise in stocks comes at in time for month-end pension fund rebalancing for institutional investors.
He noted that the news about Pezeshkian being open to ending the war isn't new, with the Iranian president saying he's open to ending the war given certain guarantees.
Adam Cochran, a policy consultant and venture fund investor, warned that Pezeshkian may not be the deciding voice in Iran's current government and that the market may be getting ahead of itself.
He also noted that the last time that Iran signaled they were ready to come to a deal, it included control of the Strait of Hormuz, which is essentially a non negotiable for the US.
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