On the 8th (local time), after news of a U.S.-Iran ceasefire agreement broke, the three major New York stock indexes surged in unison.

The Dow Jones Industrial Average rose 1,325.46 points to close at 47,909.92. It was the biggest increase since April last year. The S&P 500 added 165.96 points to 6,782.81, while the tech-heavy Nasdaq Composite climbed 617.15 points (2.80%) to 22,634.99.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the ‘fear index’, fell 4.74 points (18.39%) to 21.04. The move was attributed to a revival of risk appetite following the U.S.-Iran ceasefire agreement.

The United States and Iran accepted Pakistan's mediation proposal the previous day and agreed to a two-week ceasefire. President Trump had set 8 p.m. Eastern time the previous day as the negotiation deadline, but disclosed the ceasefire consent about an hour and a half before the cutoff. Iran also said it would reopen the Strait of Hormuz for two weeks on the condition that all attacks are halted. The two countries are scheduled to hold their first end-of-war talks on the 11th in Islamabad, the capital of Pakistan.

However, with uncertainty over transits through the Strait of Hormuz lingering and signs of the agreement wobbling from the very first day of the truce, the extent of stock gains was partly limited.

Iran said it would withdraw from the ceasefire agreement, including the reopening of the Strait of Hormuz, citing Israel's attack on Lebanon. Mohammad Bagher Ghalibaf, the speaker of the Iranian parliament, also issued a statement protesting that the United States had already violated the ceasefire accord. The United States maintained that Israel's attack on Lebanon was not within the scope of the ceasefire agreement.

International oil prices plunged more than 10%. On the ICE Futures Exchange in London, June Brent settled at $94.75 per barrel, down $14.52 (13.29%) from the previous session. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) closed at $94.41, down $18.54 (16.41%). Each marked the largest drop since March 2022 and April 2020, respectively.

As oil prices fell and inflation concerns eased, U.S. Treasury yields dropped sharply. The 10-year U.S. Treasury yield fell 5 bp (1 bp = 0.01 percentage point) to 4.290%. The two-year U.S. Treasury yield, which is sensitive to monetary policy, declined 4 bp to 3.792%.