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Equity Markets Jump Intraday, Oil Sinks Following US-Iran Ceasefire

-- US benchmark equity indexes rallied intraday, while oil prices slumped after Washington and Iran agreed to a two-week ceasefire.

The Nasdaq Composite jumped 2.9% to 22,651.5 after midday Wednesday, while the Dow Jones Industrial Average increased 2.6% to 47,803.5. The S&P 500 advanced 2.4% to 6,778.6. Barring energy's 4.6% decline, all sectors were in the green, led by a 3.9% rise in communication services.

West Texas Intermediate crude oil sank 15% to $95.85 a barrel intraday, while Brent futures tumbled 13% to $95.40.

US President Donald Trump, who had set an 8 pm ET, Tuesday, deadline for Tehran to fully reopen the Strait of Hormuz, agreed to suspend planned attacks on Iran for two weeks upon Pakistan's request. Tehran said it would allow "safe passage" through the key trading route, subject to coordination with Iranian authorities.

However, reports about ceasefire violations signified the possible fragile nature of the pact.

"While markets are hailing the agreement as cause for celebration, it remains to be seen if the ceasefire will hold, and if flows resume through the Strait of Hormuz," Stifel said in a note.

Iran halted oil tanker traffic through the waterway after Israel attacked Lebanon, CNN reported Wednesday, citing semi-official news agency Fars. Separately, Kuwait and the United Arab Emirates reportedly said they were targeted with Iranian drones and missiles.

Airline and cruise operator stocks jumped intraday, with Carnival (CCL) up 11%, the top gainer on the S&P 500. United Airlines (UAL) surged 9.9%, among the best performers on the index. Southwest Airlines (LUV) and American Airlines (AAL) were also up sharply, along with Norwegian Cruise Line (NCLH) and Royal Caribbean Cruises (RCL).

US Treasury yields were lower intraday, with the 10-year rate down 6.4 basis points at 4.28% and the two-year rate dropping six basis points to 3.77%.

In company news, Meta Platforms (META) shares soared 7.9%, among the best performers on the S&P 500, after the tech giant unveiled its Muse Spark artificial intelligence model.

Delta Air Lines (DAL) logged better-than-expected first-quarter results amid robust corporate and leisure demand. The air carrier's shares were up 5.8% intraday.

Exxon Mobil (XOM) expects its global oil-equivalent output to take a hit in the first quarter due to production disruptions caused by the Middle East conflict. Shares of the US oil giant were down 5.9%, while smaller rival Chevron (CVX) fell 5.5%, the steepest decline on the Dow.

Gold was up 1.7% at $4,764.70 per troy ounce, while silver gained 4.7% to $75.35 per ounce.

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Crude futures eased on Wednesday as the US extended its ceasefire with Iran, temporarily stalling a direct military escalation.The Brent futures contract slipped 0.8% to $97.74 per barrel. Murban closed at $96.29 on April 21 and was not trading as of the time of publishing this oil price update.US President Donald Trump said Tuesday that he extended the ceasefire with Iran while maintaining a blockade, as negotiations remain uncertain.Trump said in a Truth Social post, "... upon the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of Pakistan, we have been asked to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal."Trump said the US blockade would be maintained, signaling continued pressure, and also indicated that talks remain conditional on Iran presenting a clear negotiating position.While President Trump delayed military action against Iran at Pakistan's request, the continued closure of the Strait of Hormuz is suppressing global demand."The conflict is curbing supply, with demand destruction near 4 million barrels per day and possibly rising to 5 million mainly impacting Asia," Saxo Bank analysts said.On the supply side, data from the American Petroleum Institute revealed Tuesday that US crude oil inventories declined by 4.40 million barrels in the week ended April 17.The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.

Asia

Market Chatter: Malaysia Postpones Planned Carbon Tax Amid Middle East Worries

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Japanese equities closed higher on Wednesday, with the Nikkei 225 gaining after J.P. Morgan raised its year-end target for the benchmark to 70,000 from 61,000, citing momentum in AI and a weaker yen.On Wednesday, the Nikkei 225 rose 0.4%, or 236.69 points, to close at 59,585.86.Analysts at J.P. Morgan said concerns about overheating in the Nikkei 225 outweigh improving long-term growth prospects for Japanese equities, even as crude prices stay elevated.The benchmark index climbed to a record on Wednesday, nearing the 60,000 mark, as it recovered from a broad global selloff linked to tensions in the Middle East.In economic news, Japan's trade surplus widened to 667 billion yen in March as exports grew faster than imports, with shipments to China and the U.S. offsetting a sharp slump in Middle East trade amid the Iran conflict, data from the Ministry of Finance Japan showed.The Bank of Japan said the financial system remains stable but flagged rising risks from geopolitical tensions, higher oil costs, and exposures to real estate, foreign funds and leveraged market activity.On the corporate front, Mitsubishi UFJ Financial (TYO:8306) fell over 1% after a report said it is considering offering higher deposit rates for a planned digital bank to compete on speed and cost.Tokyo Electric Power (TYO:9501) rose about 4% after securing 4.7 billion yen in fresh grants to support ongoing nuclear compensation payouts.Advantest Corporation (TYO:6857) gained around 3% after joining Applied Materials' EPIC platform and opening a Silicon Valley research center to advance chip development.

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