Stock market jumps after Israel-Lebanon ceasefire, Hormuz opening
The stock market saw a boost after the opening bell Friday morning, after a 10-day ceasefire between Israel and Lebanon took effect and Iran declared the Strait of Hormuz “completely open.”
The S&P 500 was up 1.1 percent, and the Nasdaq composite rose 1.4 percent as of 10:30 a.m. EDT. The Dow Jones Industrial Average ticked up 2 percent, or about 987 points.
This comes after both the S&P and the Nasdaq notched records Wednesday and Thursday, as investors signaled optimism that the war was nearing an end after nearly seven weeks.
President Trump announced Thursday that Israel and Lebanon had agreed to a 10-day ceasefire following a meeting in Washington. The conflict between the two Middle Eastern countries proved perilous for the two-week pause in hostilities between the U.S. and Iran, which disagreed about whether Lebanon was included in the initial ceasefire deal.
Iran announced Friday that the Strait of Hormuz, a waterway critical to the world’s supply of oil, was “completely open.” Trump touted the news but also suggested that a U.S. blockade of the strait would remain in “full force” until a long-term deal is reached.
The markets, which took a significant hit in the first month of the conflict between the U.S. and Iran, have steadily ticked back up since late March as Trump has appeared to search for an off-ramp from the war.
The president has been particularly sensitive to market dynamics throughout both his first and second terms, resulting in a trade based on his likelihood to back down from decisions that weigh heavily on the market.
This trade, referred to as TACO, or “Trump always chickens out,” emerged in response to Trump’s tariff push last year. After announcing wide-ranging “reciprocal” tariffs last April, he quickly pulled back and put the import taxes on hold as the markets plunged.
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