Israel and Hamas Reach Ceasefire Agreement, Potentially Ending 15-Month War in the Middle East

94
2
Israel and Hamas Reach Ceasefire Agreement, Potentially Ending 15-Month War in the Middle East

Israel and Hamas Agree to Ceasefire with Hostage Exchange

After months of negotiations, Israel and Hamas have verbally agreed to a ceasefire in Gaza, including the release of several hostages. This agreement paves the way for a potential end to the 15-month war in the Middle East.

The verbal agreement comes just days before President-elect Donald Trump's inauguration. Trump acknowledged the deal in a post on Truth Social, stating, "We have a deal for the hostages in the Middle East. They will be released shortly. Thank you!"

The reported details of the agreement include a six-week ceasefire and the release of 33 Israeli hostages in exchange for the release of Palestinian prisoners. Israel still needs to formally ratify the deal, with a vote expected by Thursday.

Defense Stocks React to Ceasefire News

Defense stocks, including Lockheed Martin Corp (LMT), Northrop Grumman Corp (NOC), and RTX Corp (RTX), moved lower on the ceasefire reports despite a strong session from broader indices. The Global X Funds Global X Defense Tech ETF (SHLD) and the SPDR S&P Aerospace & Defense ETF (XAR) also pulled back from highs on the news.

At the time of writing, Lockheed Martin shares were down about 0.7%, while Northrop Grumman and RTX shares were down about 0.8%. It's worth noting that the SPDR S&P 500 (SPY) was up 1.77% at the same time.

Defense stocks have benefitted from the ongoing war in the Middle East, with the Global X Funds Defense ETF gaining more than 35% over the past year. These stocks tend to rally during periods of elevated conflict due to their heavy reliance on government contracts.

Energy Stocks Briefly React to Ceasefire News

Energy stocks, including BP P.L.C (BP), Chevron Corp (CVX), and ConocoPhillips (COP), also pulled back slightly on the ceasefire news but bounced back quickly.

The United States Oil Fund (USO) hit new 52-week highs on Wednesday, continuing the momentum from last week after the U.S. announced its most extensive sanctions on Russian oil exports to date.