Nasdaq Futures Surge 2.8% as Trump Iran Ceasefire Sparks Risk Rally

U.S. equities surged post market Tuesday after President Donald Trump announced a two-week ceasefire with Iran, easing fears of a broader Middle East conflict and triggering a sharp risk-on rally. The Dow futures jumped to 47,758.00, the S&P 500 climbed to 6,805.50, and the Nasdaq rose to 25,045.00, all posting gains of more than 2%.

The late-session rally followed a dramatic shift in geopolitical outlook after Trump said the U.S. would suspend military action against Iran for two weeks as part of a conditional ceasefire tied to reopening the Strait of Hormuz, a critical global oil artery.

Markets had been under pressure earlier in the day, with investors bracing for potential U.S. strikes ahead of a White House-imposed deadline. At one point, equities traded lower while oil prices surged amid fears of supply disruptions, according to earlier reporting from financial media.

That sentiment reversed sharply in the final hours of trading. Stocks accelerated higher as headlines confirmed the ceasefire agreement, with investors rapidly pricing out the risk of immediate escalation. The Russell 2000 led gains, rising 3.34%, signaling broad participation and a shift toward risk-sensitive assets.

Energy markets also played a central role in the move. Oil prices fell sharply following the announcement, with Brent crude posting one of its largest single-day declines in decades, according to Reuters and Axios reporting, as traders anticipated a resumption of flows through the Strait of Hormuz.

The sudden drop in oil eased concerns about inflation and supply shocks that had loomed over markets during weeks of conflict. Investors had feared that prolonged disruption in the strait—which handles a significant share of global crude shipments—could drive energy prices higher and pressure global growth.

Despite the rally, some analysts cautioned that the ceasefire may prove temporary. Reuters reported that while the truce boosted market sentiment, uncertainty remains around its durability and the broader geopolitical landscape.

Tuesday’s late surge reflects how quickly markets can reprice geopolitical risk, particularly when worst-case scenarios are avoided. The magnitude of the move suggests investors had been heavily positioned for escalation.

Looking ahead, traders will focus on whether the ceasefire holds and whether oil flows normalize in the coming days. Any breakdown in negotiations—or renewed disruption in the Strait of Hormuz—could quickly reverse the gains.