Wall Street edged higher on Thursday after US President Donald Trump announced a 10-day ceasefire between Israel and Lebanon, a development that investors interpreted as a potential step toward easing broader geopolitical tensions involving the United States and Iran.
The tentative truce, set to begin at 5 p.m. ET, comes amid ongoing efforts to revive stalled negotiations between Washington and Tehran.
Ceasefire hopes lift investor sentiment
Investor sentiment improved after Trump said he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu before announcing the agreement.
The US president wrote that he had just completed “excellent conversations” with both leaders, adding that the ceasefire was agreed “in order to achieve PEACE between their Countries.”
Trump also said Vice President JD Vance, Secretary of State Marco Rubio, and Joint Chiefs Chairman Dan Caine would “work with Israel and Lebanon to achieve a Lasting PEACE.”
The ceasefire is seen as significant because Israel’s halting its attacks on Lebanon has been a key condition for restarting broader Iran-related negotiations. Trump had earlier said in a prerecorded interview that the Iran war is “very close to over,” adding that Tehran wants to “make a deal very badly.”
Despite the optimism, a second round of talks between the US and Iran remains under discussion, with no official schedule announced.
Stocks rise but remain cautious near record highs
Equity markets reacted modestly to the development, with major indexes posting gains during the session. The S&P 500 rose 38 points from the day’s low, while the Dow Jones Industrial Average climbed 232 points. The Nasdaq Composite also advanced by roughly 230 points.
The gains come as markets hover near record levels. The S&P 500 recently closed above the 7,000 mark for the first time, while the Nasdaq has extended its rally to an 11-day winning streak—its longest since November 2021.
Investors appear to be balancing optimism around geopolitical progress with caution about potential volatility. Even if a US-Iran agreement materializes, lingering economic effects from the conflict could continue to influence market behavior.
Oil prices climb despite easing tensions
In contrast to equities, oil prices moved higher, reflecting ongoing supply concerns despite hopes for diplomatic progress.
Brent crude traded near its intraday high of $98.33, up about 3%, while US West Texas Intermediate crude rose roughly 2.3% to $93.40.
The divergence highlights the complexity of current market dynamics. While easing tensions can support risk assets, disruptions linked to the conflict—including threats to key shipping routes and infrastructure—continue to underpin energy prices.
Overall, Thursday’s market reaction suggests cautious optimism. Investors are encouraged by signs of diplomatic engagement but remain alert to the possibility of setbacks, particularly as negotiations between the US and Iran remain unresolved and geopolitical risks persist.
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