Oil plunges below $95 as the Dow surges 1,300 in a worldwide rally
following a ceasefire with Iran
[April 09, 2026] By
STAN CHOE
NEW YORK (AP) — Oil prices plunged below $95 per barrel, and stock
markets surged worldwide Wednesday after President Donald Trump pulled
back from his threat to destroy Iran.
The S&P 500 leaped 2.5% after Trump announced a two-week ceasefire with
Iran, less than 90 minutes before a deadline Trump had set for it to
open the Strait of Hormuz and allow oil tankers to exit the Persian
Gulf. The Dow Jones Industrial Average rallied 1,325 points, or 2.8%,
and the Nasdaq composite soared 2.8% following even bigger gains in
European and Asian stock markets.
To be sure, stock prices are still below where they were before the war.
And oil prices are still higher because of the threat of a resumption to
the war. The ceasefire already looks precarious, and Iran closed the
Strait of Hormuz again Wednesday in response to Israeli attacks in
Lebanon.
Such uncertainty caused some of the euphoria that fueled financial
markets in the morning to fade as Wednesday’s trading progressed, and
financial markets have been prone to sharp and sudden reversals since
the war began.
“There is a reason to be optimistic, but it is still too early to tell,
because, as you know, after all, it is Trump,” said Takashi Hiroki,
chief strategist at MONEX.
So far in the war, Trump has set several deadlines for Iran to open the
Strait of Hormuz, a main thoroughfare for oil to reach customers
worldwide from the Persian Gulf, and has threatened big repercussions if
Iran doesn’t, only to delay them.
It’s similar to a year ago, when Trump threatened stiff tariffs on
imports from other countries on “Liberation Day.” After a couple delays,
his administration eventually negotiated lower tariffs with many
countries, though still higher than from before his second term. That
led some investors to allege Trump “always chickens out,” or “TACO,” if
financial markets show enough pain.
“Is it just kicking of the can down the road, moving the goalposts, TACO
Tuesday, or whatever metaphor we’d like, to only to have tempers flare
and bombs drop again?” Brian Jacobsen, chief economic strategist at
Annex Wealth Management, asked about the two-week ceasefire with Iran.
“Who knows? But it’s good enough for now to elicit a positive response
from the markets.”
The price for a barrel of benchmark U.S. crude oil plunged 16.4% to
settle at $94.41 after almost dropping to $91 earlier in the morning.
Brent crude, the international standard, tumbled 13.3% to $94.75 per
barrel. It had briefly topped $119 when worries about the war with Iran
were at their highest, but it’s still above its roughly $70 price from
before the war.
The next moves for oil prices will depend on how many oil tankers can
start exiting the Strait of Hormuz and how easy their passage is.
Despite claims from the White House on Wednesday about an uptick in
ships transiting the strait, independent analysts say they have seen no
change in traffic through it.
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John Mauro works on the floor at the New York Stock Exchange in New
York, Tuesday, April 7, 2026. (AP Photo/Seth Wenig)
 Windward, a maritime intelligence
firm that tracks international shipping, said all ships transiting
the strait must still coordinate safe passage with Iranian
authorities, who are requiring hefty tolls of up to $1 a barrel for
outbound oil, paid in cryptocurrency. The largest supertankers carry
up to 3 million barrels of crude.
White House press secretary Karoline Leavitt said the closing of the
strait reported in Iranian state media was “completely
unacceptable.” She repeated Trump’s “expectation and demand” that
the channel be reopened.
In Asia, where countries are more reliant on oil from the Middle
East, South Korea’s Kospi stock index surged 6.9%. Japan’s Nikkei
225 leaped 5.4%, and Hong Kong’s Hang Seng jumped 3.1%.
European stock indexes rose nearly as much. Germany’s DAX returned
5.1%, and France’s CAC 40 rallied 4.5%.
On Wall Street, companies with big fuel bills rallied to trim some
of the sharp losses taken on worries about oil prices staying high.
United Airlines soared 7.9% and cut into its loss for the year,
which came into the day at 20.1%. Cruise ship operator Carnival
climbed 11.2%.
Delta Air Lines rose 3.7% after it reported stronger results for the
latest quarter than analysts expected. CEO Ed Bastian said demand
for flights remains strong, and it’s making moves to make up for
higher fuel bills. Delta on Tuesday became the latest airline to
raise its fees for checking bags.
All told, the S&P 500 rose 165.96 points to 6,782.81. The Dow Jones
Industrial Average jumped 1,325.46 to 47,909.92, and the Nasdaq
composite rallied 617.15 to 22,635.00.
In the bond market, Treasury yields dropped as hopes built that
easing oil prices could let the Federal Reserve resume its cuts to
interest rates later this year.
The yield on the 10-year Treasury fell to 4.29% from 4.33% late
Tuesday. Lower Treasury yields give a boost to prices for stocks,
bonds and all kinds of other investments. They should also ease some
of the recent rise in rates for mortgages and other loans taken out
by U.S. households and businesses.
When oil prices were screaming higher because of the war, some
traders were betting on the possibility that the Fed would have to
raise interest rates to keep a lid on inflation. Now, they’re seeing
a nearly 25% chance that the Fed could resume its cuts to rates in
2026, according to data from CME Group.
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AP journalists Yuri Kageyama, Matt Ott, Mayuko Ono, Jon Gambrell and
Michael Biesecker contributed to this report.
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