U.S. stock index futures pointed to a positive start for markets on Wednesday, indicating equities may continue to rise after the sharp gains recorded in the previous session.
Investor confidence has been supported by growing expectations that the United States could soon bring its conflict with Iran to an end, following new remarks from President Donald Trump.
Speaking with reporters at the White House on Tuesday, Trump said American forces could withdraw from Iran within “two or three weeks.”
Trump also argued that a negotiated settlement would not be necessary to conclude the war, describing a deal as “irrelevant” because “everything’s been bombed out.”
The White House later announced that Trump will address the nation at 9 p.m. ET on Wednesday to deliver an important update on the situation with Iran.
Oil prices continued to retreat after the president’s comments, with U.S. crude futures falling below the $100-per-barrel mark.
Markets surge on easing geopolitical concerns
Stocks built on early gains throughout Tuesday’s session, ending the day firmly higher across the board, with technology stocks leading the advance.
By the close, the major benchmarks were near their daily highs. The Nasdaq jumped 795.99 points, or 3.8%, to 21,590.62, while the S&P 500 climbed 184.80 points, or 2.9%, to 6,528.52. The Dow Jones Industrial Average rose 1,125.37 points, or 2.5%, to 46,341.51.
Even with Tuesday’s rally, the major indexes still recorded sizable losses for March overall. The Dow fell 5.4%, the S&P 500 declined 5.1%, and the Nasdaq dropped 4.8% during the month.
Reports of potential war wind-down lift sentiment
The strong move higher on Wall Street followed reports that the U.S. administration may be looking for a way to conclude its military involvement in the Middle East.
According to the Wall Street Journal, Trump told advisers he would consider ending the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed.
Officials cited in the report said Trump and his team believe that attempting to reopen the strait by force would likely extend the conflict beyond his preferred timeline of four to six weeks.
Those officials also indicated that the administration will continue applying diplomatic pressure on Tehran to restore commercial shipping through the strait. If that effort fails, Washington may push allied countries to lead efforts to reopen the waterway.
Stocks accelerated further in afternoon trading after Trump appeared to confirm parts of the Journal’s report in an interview with the New York Post, saying the United States would not remain in the region “too much longer.”
In the same interview, Trump suggested other nations should take responsibility for reopening the Strait of Hormuz, stating: “Let the countries that are using the strait, let them go and open it… because I would imagine whoever’s controlling the oil will be very happy to open the strait.”
Oil prices moved lower following those remarks, boosting optimism that an eventual end to the conflict could ease energy costs and help reduce inflation concerns.
Sector performance
Value hunting also played a role in Tuesday’s rally, with the Nasdaq and S&P 500 rebounding from their lowest closing levels in nearly eight months.
Gold-related equities surged alongside the rising price of the precious metal, driving the NYSE Arca Gold Bugs Index up 7.2%.
Semiconductor stocks also posted notable gains, with the Philadelphia Semiconductor Index jumping 6.2% after closing Monday at a three-month low.
Airline stocks advanced strongly as well, pushing the NYSE Arca Airline Index higher by 5.4%.
Other areas showing strength included computer hardware, biotechnology, and networking stocks, while energy companies declined as oil prices retreated during the session.
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