Wall Street’s main indexes climbed to near one-month highs on Wednesday after the US and Iran agreed to a two-week ceasefire, sending crude prices lower on expectations that energy supplies through the Strait of Hormuz could resume.

The announcement came hours before US President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz, the waterway that carries about one-fifth of global oil trade.

A senior Iranian official told Reuters that the passage could be opened on Thursday or Friday ahead of peace talks if the countries agreed upon a framework for the ceasefire.

Global markets, which had been reeling under conflicting signals for weeks, staged a rally, with stock bourses in Asia and Europe rising, while crude prices slid below $100 a barrel.

“Whether these early ‘risk-on’ moves are sustainable or not is another matter… If shipping starts to move through the Strait of Hormuz again, and there’s strong evidence that things can return to pre-war normality, that will embolden investors,” said David Morrison, senior market analyst at Trade Nation.

“But given the complexity of the issues around this, a two-week ceasefire is unlikely to be sufficient to convince investors that it’s safe to go back in the water.” At 10:06 a.m. ET, the Dow Jones Industrial Average rose 1,308.99 points, or 2.81 per cent , to 47,893.45, the S&P 500 gained 155.91 points, or 2.36 per cent , to 6,772.76 and the Nasdaq Composite gained 617.51 points, or 2.81 per cent , to 22,635.36.

The small-cap Russell 2000 Index jumped 3 per cent to a more than one-month high, while the CBOE Volatility Index slumped 4.74 points to 20.99, after hitting its lowest point since February 27.

The S&P 500 energy sector was the only one in the red, down almost 5 per cent . Exxon Mobil shed 6.3 per cent , Chevron dropped 5.5 per cent , and Occidental Petroleum lost 7.7 per cent.

Travel-linked stocks jumped, with Southwest Airlines and United Airlines advancing 10.8 per cent and 12.8 per cent , respectively. They boosted industrial stocks on the S&P 500 by 3.8 per cent , the top gainers.

Cruise operators Carnival and Norwegian Cruise Line added 14.2 per cent and 12 per cent , respectively.

The S&P 500 tech index rose 2.8 per cent , helped by chip-linked stocks. The Philadelphia SE Semiconductor index briefly hit a record high, last up 5.3 per cent .

Dow was lifted by gains in Goldman Sachs and American Express.

This week, domestic inflation readings will be scrutinized for signs of whether the elevated crude prices during the war have added to price pressures. Comments from Federal Reserve officials and minutes from its March meeting will also be parsed.

Market bets show a 33.9 per cent chance of a 25-basis-point cut in December, according to CME’s Fedwatch Tool, up from 13.6 per cent a day ago. Traders expected two cuts before the war broke out.

Among other movers, Levi Strauss gained 12.8 per cent after the denim apparel maker raised its annual sales and profit forecasts.

Delta Airlines advanced 8.6 per cent , in line with peers, despite forecasting lower-than-expected profit for the second quarter. It also did not update its annual outlook due to uncertainty over fuel prices linked to the Iran war.

Advancing issues outnumbered decliners by a 6.74-to-1 ratio on the NYSE and by a 5.53-to-1 ratio on the Nasdaq.

The S&P 500 posted 18 new 52-week highs and no new lows, while the Nasdaq Composite recorded 108 new highs and 17 new lows.