Dow Jones Surges as U.S.-Iran Reach 2-Week Ceasefire

The Dow Jones (DJIA) is set to open Wednesday up by over 2% after the U.S. and Iran agreed to a two-week ceasefire a few hours before President Trump’s deadline to strike Iran’s power plants and bridges.

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As part of the agreement, Iran will reopen the Strait of Hormuz for two weeks and allow ships to pass if they coordinate with Iranian armed forces. In addition, the two sides will meet in Islamabad, Pakistan on Friday for negotiations to permanently end the war.

U.S.–Iran Demands Set Stage Ahead of Friday

Ahead of Friday, the U.S. and Iran have each submitted demands. Iran’s terms include the removal of all sanctions, a transit fee of $2 million for each ship to cross Hormuz, and a binding guarantee against future attacks. On the other end, demands from the U.S. include ending uranium enrichment, cutting support to Hezbollah and Hamas, and fully reopening Hormuz.

Oil prices are plunging on the news, with Brent crude oil futures (BZ) down by over 16%. On Wednesday morning, a Greek-owned vessel became the first ship to cross Hormuz following the agreement.