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Stocks exploded higher on Wednesday after a 14-day ceasefire was announced.
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While traffic through the Strait of Hormuz is expected to increase, many on Wall Street think it could take weeks or even months for supplies to return to a balance with demand.
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Most on Wall Street still see oil higher for the rest of 2026 than expected, as supplies reset and demand remains firm, with reserves that were drained needing to be refilled.
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Futures are trading lower this morning, as many on Wall Street feel the temporary ceasefire may be just that. But what a difference a day can make. After it was announced that the U.S. and Iran had agreed to a Pakistan-brokered 14-day cease-fire, with some renewed traffic through the Strait of Hormuz, stocks took off and never looked back on Wednesday, as oil prices crumbled. When the closing bell finally rang, all of the major indices closed higher with the Dow Jones Industrials closing up 2.85% at 47,909, while the Nasdaq closed at 22,634, up 2.80%. The S&P 500 finished the session at 6,782, up 2.51%. The winner, and the index that has had the best year so far, the small-cap Russell 2000, was last seen at 2,620, up 2.97%.
For the second day in a row, yields were down across the entire Treasury curve, as buyers continued to snap up U.S government debt. Analysts cited ongoing safe-haven demand, despite the ceasefire, plus shifting sentiment for growth prospects for the rest of 2026. The 30-year-long bond was last seen at 4.88%, while the benchmark 10-year note closed at 4.29%.
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Needless to say, the story of the day was plummeting oil prices as the ceasefire came just before the 8 PM deadline, and you can bet the short sellers were quickly covering after a massive rally that saw prices move to the highest levels since 2022 with the start of the Ukraine-Russia war. Brent Crude finished trading on Wednesday at $96.37, down a whopping 11.81%. West Texas Intermediate, which means the most to U.S. drivers and consumers, closed down a stunning 14.56% at $96.50. Natural gas was down 4.84% to close at $2.73.
After a very volatile week and with more incoming data suggesting inflation is moving slowly higher, Gold finished a wild Wednesday up 0.20% at $4,718, while Silver was last seen up 1.56% at $74.
Crypto markets rallied strongly on Wednesday, with total market capitalization surging roughly 5% past $2.45 trillion. The move was driven by the announcement of a two-week U.S.-Iran ceasefire, which sent oil prices tumbling and triggered nearly $600 million in leveraged short liquidations. Bitcoin climbed to approximately $72,700 intraday while Ethereum rose 6% to $2,250 before settling back lower. Morgan Stanley’s new spot Bitcoin ETF (NYSEArca: MSBT) began trading with an expense ratio of 0.14%, the lowest in the market. At 8 AM EDT, Bitcoin is trading at $71,190, while Ethereum is quoted at $2,182.
