Oil dived, bonds rallied and stocks surged on Wednesday as a two-week ceasefire in the Middle East was seen as paving the way for a lasting peace and resumption of Gulf oil and gas exports.

US President Donald Trump said he agreed to suspend bombing and attacks on Iran for two weeks and that a long-term peace agreement was in progress.

US crude futures fell around 9 percent to US$103 a barrel, S&P 500 futures leapt 1.6 percent, and the dollar fell broadly.

Futures pointed to broad gains for Asia's stock markets, which have been beaten down by war and soaring energy prices, and 10-year U.S. Treasury futures jumped about 15 ticks.

The risk-sensitive Australian dollar rose more than 0.8 percent to above 70 US cents and the euro rose 0.4 percent to US$1.1647.

Major US indices had spent most of the day in negative territory but gained momentum in the final moments of the day after the White House confirmed receipt of a Pakistani proposal to extend Trump's deadline for Iran to reopen the Strait of Hormuz or face devastating attacks.

Minutes before the closing bell, the S&P 500 and the Nasdaq reversed their losses to close slightly higher, marking their fifth straight session of gains.

The Dow Jones Industrial Average fell 85 points, or 0.2 percent, to 46,584, the S&P 500 gained 5 points, or 0.1 percent to 6,616 and the Nasdaq Composite gained 21 points, or 0.1 percent, to 22,017. (Reuters)



Edited by Cecil Wong