Dow jumps 500 points, oil prices crater as investors bet Israel-Iran truce will hold

Stocks rose while oil prices plummeted again on Tuesday, as investors bet that a delicate ceasefire between Israel and Iran will hold.

The Dow Jones Industrial Average climbed 507.24 points, or 1.19%, and closed at 43,089.02. The S&P 500

 gained 1.11% to end at 6,092.18. The broad market index is now about 0.9% away from its 52-week high. The Nasdaq Composite

 advanced 1.43%, settling at 19,912.53. The Nasdaq 100

 added 1.53% for a record close of 22,190.52.

Oil prices were sharply lower for a second straight day. U.S. crude oil settled 6% lower, while international benchmark Brent dropped 6.1%. A day earlier, U.S. crude oil fell more than 7%. Gains for equities gained steam as oil hit a fresh low for the session.

Airline stocks were higher as oil pulled back, with shares of United Airlines

 and Delta rising more than 2%. Broadcom and Nvidia

 advanced nearly 4% and 2.6%, respectively, as investor appetite for risk grew.

These moves come as President Donald Trump tried to salvage a fragile ceasefire between Israel and Iran that took effect early Tuesday morning. Both sides have accused the other of violating the agreement. Israel said a radar system close to Iran’s capital city Tehran was attacked, and it accused Iran of launching missile strikes against Israel, which Iran denies.

Trump said on Truth Social that “ISRAEL is not going to attack Iran,” and added that the ceasefire is still in effect. The president earlier expressed frustration toward both Israel and Iran for breaking the agreement by saying he was “unhappy” with both sides.

“The key event for the market was how quick and limited the US involvement was, as well as the ‘weak’ response from Iran which was essentially a choreographed fireworks display for domestic consumption,” said Jon Brager, portfolio manager at Palmer Square Capital Management. “So even if the ceasefire results in occasional flare ups, the market has decided this risk is now in the rearview mirror and the focus probably returns to tariffs and fiscal policy.”

Tuesday’s gains added to Monday’s strong advances. The major averages jumped Monday after Qatar’s Defense Ministry said that its air defense had intercepted Iran’s retaliatory strike on a U.S. military base. Week to date, the major averages are up more than 2%.

Investors also parsed fresh commentary from Federal Reserve Chairman Jerome Powell before the House Financial Services Committee. Powell signaled that the central bank is in no rush to cut interest rates and will wait to see how Trump’s tariffs impact the economy.

Powell’s appearance on Capitol Hill comes at a pivotal time: He is facing an aggressive push from the White House to cut rates — and in recent days two Fed officials have said they could see a case for dialing back policy as early as July.