Oil Plunges 17% On Trump, Iran Ceasefire Talks — 7 War-Battered Stocks Surge Higher

President Donald Trump claimed a conditional two-week ceasefire with Iran, but hours after the announcement, Iran and Gulf Arab countries continued to report new attacks on Wednesday. Still, crude markets repriced without waiting for confirmation.

West Texas Intermediate crude futures — as closely tracked by the United States Oil Fund (NYSE:USO) — dropped 17% to $93 a barrel early Wednesday morning in New York. They’re on pace for their worst single-session decline since April 2020, igniting a broad pre-market relief rally that sent S&P 500 futures up nearly 3%.

The move is a direct position unwind: traders who had priced in a prolonged Strait of Hormuz disruption — through which roughly 20% of global seaborne oil passes — are now aggressively reversing those positions. Brent crude followed in lockstep.

Details Following Ceasefire Claims Remain Unclear

At 6:32 p.m. ET Tuesday, shortly before his own 8 p.m. ET deadline to “destroy a whole civilization,” Trump posted on Truth Social:

“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided ceasefire!”

But sporadic Iran–Israel attacks continued into Wednesday, according to the Associated Press, casting uncertainty over a "fragile" deal described by U.S. Vice President JD Vance. Key terms remain unclear, with Iran claiming it could charge ships transiting the Strait of Hormuz—a move that raises questions about safety and international acceptance. Meanwhile, Israel is expected to continue its Lebanon operations against Hezbollah regardless of the deal.

Another tweet followed with Trump saying the “U.S. will work closely with Iran,” adding that there won’t be enrichment of uranium in exchange for tariffs and sanctions relief to Tehran. Many of Trump’s so-called 15 points have already been agreed to, he claims.

Iran’s Foreign Minister Seyed Abbas Araghchi confirmed Tehran’s acceptance in a statement from the Supreme National Security Council, saying that if attacks against Iran are halted, Iran’s armed forces will cease their defensive operations — and that safe passage through the Strait of Hormuz would be possible for two weeks via coordination with Iran’s military.

7 Stocks Rallying On Wednesday

Airlines and travel names — among the hardest-hit sectors during the conflict’s escalation — led the pre-market recovery. Seven names in the Russell 1000 surged more than 10% before the open on Wednesday.

Each was systematically compressed by the same war mechanism: jet fuel costs destroying airline margins, high-price anxiety freezing cruise bookings, or energy-cost inflation gutting the economics of gold mining.

What Analysts Are Watching

Ed Yardeni of Yardeni Research said the ceasefire confirms his call from the prior Tuesday night that the S&P 500 had bottomed on Monday. His preferred sentiment indicator remained bearish this week — which he reads as bullish from a contrarian standpoint.

But he was direct about the ceiling: a two-week pause is not a resolution, and financial markets will remain sensitive to any breakdown in talks.

John Canavan, lead analyst at Oxford Economics, noted that the overnight move in global bond markets revealed a notable divergence: gilt yields fell by 19–26 bps and bund yields by 11–25 bps, while Treasury yields fell by only 3–8 bps.

The front end is driving the global rally as central bank policy expectations shifted sharply.

Markets priced in more than 15 bps of Fed rate cuts for 2026 overnight — a dramatic reversal from as much as 20 bps of hikes priced just two weeks ago at the height of the conflict. ECB pricing moved from three hikes to two.

Oxford Economics’ baseline continues to call for the Fed to look past the one-time inflationary boost from higher oil prices and cut rates twice this year to preempt labor market weakness. The risk, Canavan noted, is that rate cut timing gets delayed if oil prices stabilize at a higher level than expected — though long-term inflation expectations remaining well anchored gives the Fed room to act.

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