The Dow Jones (DJIA) is up over 2% on Wednesday after the U.S. and Iran agreed to a two-week ceasefire to allow time for negotiations to end the war.
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Trade QQQ with leverageAs part of the ceasefire deal, Iran will allow ships that coordinate with Iranian armed forces to cross the Strait of Hormuz for two weeks. “If any vessel tries to transit without permission, will be destroyed,” warned the Iranian navy in a radio message broadcast to ships. This morning, two vessels flagged under Greece and Liberia became the first to travel through the passageway following the ceasefire.
However, missiles are still flying in the Middle East, with Israel launching strikes against several targets in Beirut, Lebanon. In response, Iran warned that the attack breaches the ceasefire agreement and threatened to keep Hormuz closed. Later on, President Trump told PBS that Lebanon is excluded from the ceasefire because of Hezbollah’s presence in the country.
“Violations of ceasefire have been reported at few places across the conflict zone which undermine the spirit of peace process,” said Pakistani Prime Minister Shehbaz Sharif.
Officials from the U.S. and Iran are set to meet on Friday in Islamabad, Pakistan. Both sides have issued demands ahead of the meeting. Iran’s demands include a removal of all U.S. sanctions, a Hormuz transit fee of $2 million per ship, and a guarantee against future attacks. Meanwhile, requests from the U.S. include an end to all uranium enrichment on Iranian soil and a full reopening of Hormuz.
The Dow Jones is up by 2.57% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Consumer cyclical, industrial, and financial stocks are leading the index higher, with Caterpillar (CAT) and Home Depot (HD) up by over 5%. On the other hand, Chevron (CVX) is trading lower as Brent crude oil futures (BZ) plummet 13%.
While tech stocks are in the green, the sector is still trailing the overall index, marked by relative weakness in IBM (IBM) and Salesforce (CRM). Verizon (VZ) is also facing pressure after DBS Bank lowered its rating to “hold” from “buy” with a $52 price target.
Is the Dow Jones a Good Long-Term Investment?
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is rising alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $560.22, implying upside of 17.20% from current prices. The 30 holdings in DIA carry 30 buy ratings, zero hold ratings, and zero sell ratings.