The Dow Jones Industrial Average (DJIA) climbed approximately 300 points, or 0.7%, on Thursday, extending a two-day rally that has helped the index recover from recent war-era lows [1]. The S&P 500 rose by 0.6%, and the Nasdaq Composite gained 0.7%, reflecting sustained risk appetite among investors despite lingering doubts about the durability of the two-week ceasefire between the US and Iran [1]. The DJIA is now trading above 48,000, having rebounded from the 200-day exponential moving average near 46,700 and reclaimed the 50-day EMA around 47,550. Technical indicators, such as the Stochastic RSI above 60, suggest bullish momentum is building but not yet overextended, with resistance noted near the 48,200 level, which marked Thursday's close [1].
Market sentiment improved late in the session after Israeli Prime Minister Benjamin Netanyahu announced he had instructed his cabinet to begin direct negotiations with Lebanon. These talks, expected to start next week at the State Department in Washington, will focus on disarming Hezbollah and establishing peaceful relations between Israel and Lebanon [1]. The announcement followed calls with President Trump and White House envoy Steve Witkoff, who reportedly urged Netanyahu to scale back strikes on Lebanon to support the broader peace process. Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, had earlier warned that continued Israeli strikes on Hezbollah would carry consequences, calling the attacks a violation of the ceasefire agreement [1].
The S&P 500 moved into positive territory and oil prices retreated from their intraday highs following Netanyahu's statement, as traders interpreted the willingness to negotiate as a step toward de-escalation on the Lebanon front, which had been the primary threat to the fragile truce [1]. West Texas Intermediate (WTI) futures traded above $98 per barrel on Thursday after briefly topping $100 earlier in the session, while Brent crude futures rose around 1% to above $95. This rebound follows Wednesday's dramatic intraday plunge of over 10% after the ceasefire announcement [1]. The Strait of Hormuz remains functionally closed, with only some dry cargo bulk carriers traversing the waterway since the deal was struck. Around 230 ships loaded with oil are reportedly waiting to pass through, and the head of the UAE's main oil company stated that vessels must be allowed to navigate the corridor without conditions [1]. Vice President JD Vance is set to lead a US delegation to Islamabad on Saturday for the first round of direct talks with Iran [1].
On the economic front, the Core Personal Consumption Expenditures Price Index (PCE), the Federal Reserve's preferred inflation gauge, came in at 0.4% month-over-month for February [1]. GDP was revised lower, though the specific figures are not available in the source [1].
CONCLUSION
The announcement of direct talks between Israel and Lebanon provided a significant boost to market sentiment, driving major US indices higher and easing geopolitical concerns. Oil prices rebounded but remain volatile amid ongoing uncertainty in the Strait of Hormuz. The market's positive reaction reflects optimism about potential de-escalation, though economic data and unresolved regional tensions continue to influence investor outlook.