Markets Post Best Day in a Year as Iran Ceasefire Sparks Global Relief Rally

A two-week ceasefire between the United States and Iran sent global equities soaring and oil prices plunging on Thursday, but the agreement’s fragility left investors calculating how long the calm would last.

When markets opened on Thursday morning, traders already had one eye on the Middle East and the other on their screens. Within hours of a fragile ceasefire between the United States and Iran taking effect, the Dow Jones Industrial Average surged 1,325 points — a 2.85% gain that marked its best single-day performance since April 2025. The S&P 500 climbed 2.51% to close at 6,782.81, while the tech-heavy Nasdaq Composite jumped 2.8%. A relief rally is what happens when markets snap back sharply after a period of fear-driven selling — and Thursday’s move was one of the most dramatic in recent memory.

Oil’s Steepest Single-Day Drop Since 2020

The catalyst behind the rally was a plunge in oil prices. West Texas Intermediate (WTI) crude — the U.S. benchmark for oil pricing — tumbled 16.4% to settle at $94.41 per barrel, its steepest single-day decline since the demand collapse of 2020. The sell-off was driven by hopes that the ceasefire would allow oil tankers to resume transit through the Strait of Hormuz, the narrow waterway between Iran and Oman that carries roughly 20% of the world’s crude oil and liquefied natural gas. Iran closed the strait in late February in retaliation for the U.S.-Israeli military campaign, and the International Maritime Organization estimates approximately 2,000 ships — including oil tankers, cargo carriers, and six cruise liners — remain stranded in the Persian Gulf.

Under the ceasefire terms, Iran agreed to the “complete, immediate, and safe opening” of the strait, while the United States agreed to halt military strikes for an initial two-week period. But the reopening has been slower than markets hoped. According to Matt Smith, an oil analyst at Kpler, only a handful of vessels transited the strait on Thursday. “We may just see 10 to 15 vessels given that Iran is still vetting who goes through,” he noted. Iran has also signaled it will demand that shipping firms pay tolls in cryptocurrency and submit to weapons inspections before passage.

A Truly Global Rally

The relief was not limited to Wall Street. Markets across Asia and Europe — regions far more dependent on Middle Eastern oil imports — posted even larger gains. South Korea’s Kospi led the charge with a 6.87% surge. Japan’s Nikkei 225 climbed 5.39%, its best session since April 2025. In Europe, Germany’s DAX soared 5.06% and France’s CAC 40 jumped 4.49%, each posting their strongest single-day performance since March 2022. The outsized international moves reflect how deeply the Hormuz closure had rattled energy-dependent economies — European natural gas prices had risen more than 40% since the crisis began in February.

Airlines and Cruise Lines Lead the U.S. Rebound

Within the U.S. market, sectors most exposed to fuel costs led the recovery. United Airlines surged 11%, Southwest Airlines gained nearly 10%, and JetBlue added roughly 8%. Cruise operators saw even more dramatic moves: Carnival Corporation jumped 10%, Royal Caribbean climbed 8.5%, and Norwegian Cruise Line rose 8%. These companies had been among the hardest hit during the crisis, as soaring jet fuel and marine diesel prices threatened to erode margins.

The timing was particularly notable for Delta Air Lines, which reported first-quarter earnings on the same morning. Delta posted record adjusted operating revenue of $14.2 billion, up 9.4% year over year, with adjusted earnings per share of $0.64 — a 44% increase from the prior year. The airline generated $2.4 billion in operating cash flow and guided for revenue growth in the low teens for the June quarter. The only sector that declined on the day was energy, which fell 3.66% as lower oil prices cut directly into producer revenues.

What to Watch

Ceasefire Durability: Iran’s parliamentary speaker accused the United States of breaching ceasefire terms on Friday morning, and futures dipped 0.3% at the open while WTI oil rebounded toward $98 per barrel. With roughly 2,000 ships still stranded and only a handful transiting the strait daily, the two-week ceasefire window is the key variable for markets through late April. Any escalation could reverse Thursday’s gains rapidly.

Bank Earnings Season: Goldman Sachs reports Q1 earnings on April 13 and JPMorgan Chase follows on April 14. Analysts have described this round as the “definitive litmus test” for whether the financial system can withstand the geopolitical and energy shocks of recent months. Watch for commentary on trading revenue, loan loss reserves, and credit quality in energy-exposed portfolios.

Inflation and the Fed: March CPI data released last week showed headline inflation jumping to 3.1% from 2.4% in February, driven largely by surging fuel costs from the Hormuz crisis. With the Fed holding rates steady at 3.50% to 3.75%, markets are watching whether the ceasefire can bring energy prices down enough to ease inflation — or whether the damage to consumer prices is already baked in for the spring quarter.