NEW YORK - US stocks closed sharply higher on April 8 after a last-minute, two-week ceasefire agreement between the United States and Iran lifted investor sentiment.

All three major US stock indexes surged at the opening bell, muscled higher by a broad relief rally after a deal brokered by Pakistan resulted in a two-week suspension of the war.

The conflict, which began with joint US-Israeli strikes on Iran on Feb 28, has sent world markets reeling, disrupted global oil supply and sparked fears of rising inflation.

A senior Iranian official told Reuters that the crucial Strait of Hormuz, through which one-fifth of the world’s oil is shipped, could be reopened on April 9 or 10 ahead of peace talks if the countries agreed upon a framework for the ceasefire.

“It’s an expected move today and there’s still a lot of work to do, but I think the market is quite relieved,” said Mr Mike Dickson, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

“The other side of this coin could have been a lot worse and frankly there’s a good reason to think that it was possible too. So you’re seeing that relief rally in the hardest-hit areas of the market.”

The S&P 500 shot above its 200-day moving average for the first time since mid-March, while the Dow registered its largest single-session percentage gain since April 9, 2025.

Economically sensitive Dow Transports touched an all-time high, while the Russell 2000 outperformed its larger-cap peers. Chips jumped 6.3 per cent. The rally was not confined to US i...