Wall Street just had its best day in months. And it only took two words: cease fire.

The Dow jumped over 1,200 points on Wednesday. President Trump said he'd pause attacks on Iran for two weeks. Tehran agreed to reopen the Strait of Hormuz - the passage that moves about 20% of the world's oil.

Oil Crashed. Stocks Took Off.

The deal sent oil into freefall. West Texas Intermediate crude dropped nearly 17% to about $93 a barrel. Brent crude sank to around $91.

The oil crash did two things. It eased fears of a fresh price spike. And it boosted hopes that the Fed might still cut rates by year end.

Traders pushed rate-cut odds for December up to 43%, per CME's FedWatch tool. That's up from just 14% a week ago.

The Rally Went Wide

This wasn't just Big Tech. The Russell 2000 climbed to within 3% of its January peak. The Dow Jones Transportation Average hit a fresh high, up 4%.

Chip stocks led the charge. The Philadelphia Semiconductor Index and the iShares Semiconductor ETF both hit their first record highs since February. Names like Micron, Western Digital, and Applied Materials all popped.

Travel stocks surged too. Airbnb, Booking Holdings, and Marriott all climbed as cheaper fuel gave the sector room to run.

Worth Watching

The rally was broad. But a key question still hangs over it - does the cease fire hold? Iran's parliament speaker said the U.S. had already broken the deal. Missiles kept flying across the Gulf even after the truce started.

Markets loved the headline. Whether the follow-through matches is a different story.