• U.S. stocks rallied after President Trump announced the cancellation of planned military strikes against Iran, boosting risk sentiment.
  • The Nasdaq Composite surged 1.3% as tech shares led gains amid easing geopolitical tensions.
  • Oil prices retreated on the de-escalation news, further supporting equity markets.

Markets Cheer De-escalation

U.S. equities extended their advance on Thursday after President Donald Trump said he had called off a scheduled military strike against Iran, fueling a relief rally across major indices. The Nasdaq Composite added 1.3%, while the S&P 500 and Dow Jones Industrial Average also posted solid gains, according to market data.

The announcement, which came late Wednesday, marked a sharp reversal from earlier preparations for a retaliatory attack following Iran's downing of an American drone. “We were cocked and loaded to retaliate last night,” Trump said in a series of tweets, adding that he decided to halt the operation after being told it could cause disproportionate casualties. The move was widely interpreted as a signal that the administration may prefer diplomatic channels, at least for now.

Oil Retreats, Tech Leads

Crude oil prices slid on the news, with West Texas Intermediate falling over 2% to around $54 a barrel, as traders unwound geopolitical risk premiums. Lower energy costs provided an additional tailwind for consumer-facing and tech stocks, which typically benefit from reduced input expenses. Apple Inc. and Microsoft Corp. each rose more than 1%, contributing to the Nasdaq's outperformance.

“The market is breathing a sigh of relief,” said a senior equity strategist at a major investment bank, speaking on condition of anonymity. “But the underlying tensions remain, and the sustainability of this rally depends on whether we see genuine progress in talks.”

Diplomacy in Focus

In the hours following Trump's tweet, Iranian officials indicated they were open to renewed negotiations, though no formal talks have been scheduled. The United States has imposed crippling sanctions on Iran's oil exports, and the two sides have been locked in a war of words for weeks. While traders welcomed the de-escalation, many cautioned that the situation remains fluid. “We've seen this movie before,” said a portfolio manager at a New York-based hedge fund. “One tweet can reverse everything.”

The CBOE Volatility Index, or VIX, fell about 8% to 15.5, reflecting reduced demand for portfolio protection. Bond yields edged higher as investors rotated out of safe-haven assets, with the 10-year Treasury yield rising 3 basis points to 2.06%.

This article was updated at 4:15 p.m. EST to include market close data.