U.S. stocks climbed for the second consecutive day on Thursday, even as oil prices increased, following news that Israel and Lebanon will start direct negotiations.
The Dow Jones Industrial Average gained 276 points, translating to a 0.6% rise, while the S&P 500 and Nasdaq increased by 0.6% and 0.8%, respectively.
Brent crude prices went up by 2% to $97 a barrel, and West Texas Intermediate crude experienced a nearly 4% hike, reaching $98 a barrel.
According to AAA, the national average price for gasoline, which usually trails oil price movements by a few weeks, continued to rise above $4 per gallon, hitting $4.17 on Thursday.
The Dow had its largest gain since April 2025 on Wednesday after oil prices fell following President Trump’s announcement of a two-week cease-fire with Iran.
He mentioned that this cease-fire hinges on the reopening of the Strait of Hormuz, a vital passage for about 20% of the world’s oil supply. However, reports indicate that Iran is still blocking numerous ships citing breaches of the agreement.
In a late-night statement, Iran accused the U.S. of breaching the joint ceasefire deal after Israel conducted a significant airstrike on Hezbollah in Lebanon, causing stock prices to drop.
However, after Israeli Prime Minister Benjamin Netanyahu announced agreements for talks with Lebanon on Thursday, stock indexes rebounded and began trading higher.
On another note, Iran is said to be aiming for up to $2 million in tolls per ship to allow safe passage through the strait, which could complicate oil transportation in the Persian Gulf.
Regarding this situation, President Trump expressed openness to the idea on ABC News, mentioning that U.S. participation would be key, calling it “a beautiful thing.”
Experts in energy have cautioned that if the straits were completely reopened, it might take months for global supply to stabilize, and that U.S. gasoline prices are likely to remain elevated into the summer.
Despite the temporary peace agreement, tension still looms, with President Trump warning of a “bigger, better, more powerful” military response if Iran doesn’t adhere to the deal.
In a post on Truth Social, the president confirmed that U.S. forces will stay in the Middle East until Iran fully complies with the terms.
Meanwhile, Vice President J.D. Vance is set to lead a U.S. delegation for talks with Iran in Islamabad this Saturday, alongside Pakistani mediators.
