At the close, the Dow Jones Industrial Average had increased by 1.2 percent, the broad S&P 500 index gained 1.5 percent, while the technology-heavy Nasdaq Composite Index rose 2 percent.
On Wednesday night, President Donald Trump announced that the United States was pausing efforts to escort ships through the Strait of Hormuz to create better conditions for an agreement with Tehran.
According to media reports, Iran is currently looking at a 14-point "declaration of intent" from Washington, and an Iranian response is expected within two days.
The price of oil fell sharply in the wake of the events; at 10 p.m., a barrel of North Sea oil cost just over $101.
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