Major stocks and indexes in the United States surged on Wednesday following the comments made by US President Donald Trump suggesting a de-escalation in the tensions between the country and Iran. Trump's comments were apparently a sigh of relief for investors, who were fearful that an all-out conflict with Iran could further bring down equities in an already suffering market.
On Wednesday, the Dow Jones Industrial Average rose by 0.6 percent to 28,745.09, while the NASDAQ Composite gained 0.7 percent to 9,129.24 at closing. The S&P 500 hit an intraday all-time high when it climbed by 0.5 percent to 3,253.05.
Other stocks also remained in the green throughout the trading day, with some dropping below their intra-day highs after unconfirmed reports of explosions inside a US base in Baghdad. Prior to the rally, the S&P 500, the NASDAQ, and the Dow were at their worst levels in overnight trading following news of the Iranian attack.
Trump had mentioned that Iran appeared to be "standing down" following its attack on the Ain al-Asad airbase. The president then added that the US would continue with its imposition of further economic sanctions against the Iranian regime.
Analysts explained that Trump's statements have to some degree defused the anxiety over the situation and most investors have taken it as a sigh of relief, resulting in the slight rally. Prices for safe-haven assets such as gold also retracted slightly as investors returned to riskier assets following Trump's statements. Gold futures for February delivery recovered slightly and dropped by 0.9 percent before closing at $1,560.20 per ounce.
Outside of the United States, global markets slid as investors braced for a possible all-out conflict between the United States and Iran. Tensions were at an all-time high following the launch of a US-led airstrike one an airport in Iraq that killed Iranian military leader Qasem Soleimani.
The killing of the military leader put massive pressure on global markets, with major global stocks dipping and global oil and gas prices surging to new highs. An all-out conflict in the region is expected to disrupt oil supplies, with some analysts predicting a continued rally in global oil prices as a result.
The death of one of its military leaders prompted Iran to retaliate by attacking US troops in Iraq. Trump addressed the attack and mentioned that there were no American casualties during the Iran attack on Tuesday. Trump also clarified that the attack did not damage any oil and military infrastructure.
