BANGKOK (AP) — Stocks rallied Tuesday after U.S. President Donald Trump announced a ceasefire in the Israel-Iran conflict, although the situation remained unclear as attacks continued.
Trump said Israel and Iran had agreed to a “complete and total ceasefire” soon after Iran launched limited missile attacks Monday on a U.S. military base in Qatar, retaliating for the American bombing of its nuclear sites over the weekend.
Uncertainty remained, with Israel not immediately confirming any ceasefire. It was unclear what the missile launches would do for the ceasefire’s timeline.
Trump’s announcement on Truth Social said the ceasefire wouldn’t begin until about midnight Tuesday, Eastern time. He said it would bring an “Official END” to the war.
U.S. futures advanced, as contracts for the S&P 500 and the Dow Jones Industrial Average gained 0.5%.
In Asia, Tokyo’s Nikkei 225 rose 1% to 38,756.00 and the Hang Seng in Hong Kong gained 1.7% to 24,078.94.
The Shanghai Composite index climbed 0.9% to 3,411.92.
In South Korea, the Kospi jumped 2.3% to 3,082.90, while Australia’s S&P/ASX 200 gained 0.9% to 8,551.40.
Oil prices fell further, after tumbling on Monday as fears subsided of an Iranian blockade of the Strait of Hormuz, a vital waterway for shipping crude.
The price of oil initially jumped 6% after trading began Sunday night, a signal of rising worries as investors got their first chance to react to the U.S. bombings. But it quickly erased all those gains, with U.S. benchmark crude falling 7.2%. It dropped further early Tuesday, giving up 2.7% to $66.67 per barrel. It had briefly topped $78.
Brent crude, the international standard, shed 2.5% early Tuesday to $69.68.
U.S. stocks rallied on Monday despite the United States’ bunker-busting entry into its war with Israel.
The S&P 500 climbed 1% to 6,025.17 and the Dow industrials gained 0.9% to 42,581.78. The Nasdaq composite index advanced 0.9% to 19,630.97.
That followed a week when stock prices had jumped up and down on worries about the conflict potentially escalating.
Iran’s retaliation appeared not to target the flow of oil. The fear throughout the Israel-Iran war has been that it could squeeze supplies, pumping up prices for crude, gasoline and other products.
Back in the U.S., Treasury yields eased after a top Federal Reserve official said she would support cutting rates at the Fed’s next meeting, as long as “inflation pressures remain contained.”
Investors will be watching for Fed. Chair Jerome Powell’s comments to the U.S. Congress later Tuesday, analysts said.
The yield on the 10-year Treasury fell to 4.33% from 4.38% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, dropped to 3.84% from 3.90%.
The Federal Reserve has been hesitant to cut interest rates this year because it’s waiting to see how much higher tariffs imposed by Trump will hurt the U.S. economy and raise inflation.
Inflation has remained relatively tame recently, but higher oil and gasoline prices would push it higher. That could keep the Fed on hold because cuts to rates can fan inflation while they also give the economy a boost.
On Wall Street, Elon Musk’s Tesla was the single strongest force pushing the S&P 500 higher after jumping 8.2%. The electric-vehicle company began a test run on Sunday of a small squad of self-driving cabs in Austin, Texas. It’s something that Musk has long been touting and integral to Tesla’s stock price being as high as it is.
Hims & Hers Health tumbled 34.6% after Novo Nordisk said it will no longer work with the company to sell its popular Wegovy obesity drug. Novo Nordisk’s stock that trades in the United States fell 5.5%.
In currency dealings early Tuesday, the U.S. dollar fell to 145.34 Japanese yen from 145.16 yen late Monday. The euro rose to $1.1604 from $1.1575.
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AP Business Writer Stan Choe contributed.
