US stocks rise, oil prices plunge on hopes Trump can restore Israel-Iran cease-fire

US stocks rose while oil prices plunged sharply Tuesday as investors hoped that President Trump could restore a fragile cease-fire agreement between Israel and Iran.

Also on Tuesday, Federal Reserve Chair Jerome Powell said in prepared comments for his testimony to Congress that the central bank is in no rush to cut interest rates as it continues to maintain a “wait-and-see” approach.

The Dow Jones Industrial Average jumped 367 points, or 0.9%, by approximately 11:10 a.m. ET.

The S&P 500 and Nasdaq gained 0.8% and 1.2%, respectively. 

US crude oil and international benchmark Brent both plummeted more than 4%. 

Investors remained optimistic that Trump would be able to salvage the cease-fire after both countries reportedly broke the agreement, launching attacks on another after the peace deal supposedly took hold.

In a Truth Social post Tuesday morning, Trump said the cease-fire is still in effect.

“ISRAEL is not going to attack Iran. All planes will turn around and head home, while doing a friendly ‘Plane Wave’ to Iran,” Trump wrote. 

Investors pushed stocks higher on “the idea that this will remain a short-lived war, rather than a long and drawn out conflict,” Chris Brigati, chief investment officer at SWBC, said in a note. 

“This de-escalation is leading investors to be more comfortable engaging in risk-on trades in the equity market,” Brigati continued.

Risky airline stocks soared higher Tuesday morning, with shares of United Airlines, Frontier and Delta jumping 1.5%, 7% and 2.2%, respectively.

Tech stocks also saw gains thanks to the “risk-on” trading, with Broadcom and Nvidia rising 3.6% and 1.9%, respectively.

“With a weakened Iran and no nuclear capabilities, there is a growing view from tech investors that the opportunity for the Middle East to embrace the tech and AI boom is now on the doorstep,” Wedbush Securities analyst Dan Ives wrote in a note Tuesday.

Earlier Tuesday morning, Trump made clear he was “not happy with Israel” in explosive comments as he left Joint Base Andrews for a summit.

“We basically have two countries that have been fighting so long and so hard that they don’t know what the f–k they’re doing, do you understand?” he told reporters.

He said he thinks both countries violated the terms of the cease-fire.

The Dow had rallied 375 points, or 0.9%, to 42,581 on Monday over relief that Iran’s retaliatory strike on a US base in Qatar was intercepted and appeared more symbolic than escalatory.