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WALL STREET ENDS SHARPLY HIGHER ON - WAIT FOR IT - REVIVED PEACE HOPES

U.S. stocks rallied after President Trump announced his decision not to bombard Iran tonight, the latest move in a pattern of threat-and-capitulate, this time citing progress in negotiations to end the war and reopen traffic through the Strait of Hormuz.

The turnabout falls on the same day the World Bank cut its 2026 global growth outlook to 2.5% due to the U.S.-Iran war, its slowest annual outlook since the COVID era, and warned growth could slow to 1.3% if energy supply restrictions persist.

A broad rally sent all three major U.S. stock indexes up well over 1.5%, with the S&P 500 and the Nasdaq logging their largest one-day percentage gain in two months.

The Dow Jones Industrial Average .DJI rose 929.97 points, or 1.86%, to 50,848.75. The S&P 500 .SPX gained 127.31 points, or 1.75%, to 7,394.30 and the Nasdaq Composite .IXIC gained 640.16 points, or 2.54%, to 25,809.66.

With today's gains, the S&P 500 and the Nasdaq are now on track to scratch out small weekly gains. The Dow remains nominally lower than last Friday's close.

Chips roared back to life, with the Philadelphia Semiconductor index .SOX surging 7.9%, its biggest daily jump since the Liberation Day seesaw of April 2025.

Industrials .SPLRCI, materials .SPLRCM, and tech .SPLRCT were the top performers among the S&P's 11 major sectors. Energy shares .SPNY were the day's biggest losers, after front-month WTI and Brent crude futures settled down 2.6% and 2.9%, respectively.

The day started with tentative gains as potential bargain hunters emerged from the woodwork on the heels of steep selloffs driven by fears that a prolonged U.S.-Iran war and its upward pressure on energy prices could morph into a broader, more systemic inflation that all but ensured that the Federal Reserve, following the ECB's example, would take a hawkish policy turn.

Those fears were hardly put to rest by the Labor Department's PPI report, which showed year-over-year producer price growth hitting a 3-1/2-year high.

Separately, a SpaceX FWP filing reveals the company's hotly anticipated IPO on Friday will offer 555.6 million shares of class A common stock at $135 per share.

Here's your closing snapshot:

(Stephen Culp)

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EARLIER ON LIVE MARKETS:

INVESTOR GLOOM DEEPENS, BULL-BEAR GAP WIDENS SHARPLY - AAII CLICK HERE

INVEST FOR THE LONG TERM BUT TAKE ADVANTAGE OF VOLATILITY CLICK HERE

WALL STREET WONDERS IF SPACEX IS PULLING CASH FROM THE AI TRADE CLICK HERE

HEATWAVE: PPI HITS 3-1/2 YEAR HIGH, JOBLESS CLAIMS HIGHEST SINCE FEBRUARY CLICK HERE

CHIP COMEBACK: TECH LEADS MARKET REBOUND AFTER ROUT CLICK HERE

TECH BARGAIN HUNTING LIFTS FUTURES DESPITE MIXED PPI REPORT CLICK HERE

EUROPE AT HALF-TIME: COUNTDOWN TO ECB'S 'INSURANCE HIKE' CLICK HERE

A RECORD WEEK FOR VOLATILITY IN SEOUL CLICK HERE

FRIDAY'S TECH SELLOFF VS TUESDAY'S CLICK HERE

POSITIVE START CLICK HERE

EUROPE BEFORE THE BELL: NOT YOUR EVERYDAY CEASEFIRE CLICK HERE

TECH AND WAR JITTERS SAP CONFIDENCE CLICK HERE