Major stock indices on Wall Street climbed on Wednesday on hopes of a potential US-Iran peace deal and enthusiasm around artificial intelligence.
At the open, the Dow Jones Industrial Average rose 143.9 points, or 0.29%, to 49,442.19. The S&P 500 rose 34.9 points, or 0.48%, to 7,294.14, while the Nasdaq Composite rose 169.0 points, or 0.67%, to 25,495.166.
According to news outlet Axios, the United States and Iran are nearing an agreement on a concise, one-page memorandum of understanding. This document aims to halt the current conflict and establish a foundational framework for more comprehensive nuclear negotiations. Early on Wednesday, President Donald Trump said that while a proposal to bring the war to an “end” exists, he also cautioned that Iran would face significantly more intense American strikes if it rejects the stipulated conditions.
Following these reports, global oil prices experienced a sharp decline on Wednesday. Brent crude oil, the primary international benchmark, fell 5.7% to $103.61, a substantial drop from levels exceeding $115 earlier in the week. During the session, Brent briefly plummeted below the $97 mark before stabilizing back above $100.
This market retreat occurred as Trump suggested the Strait of Hormuz could be “OPEN TO ALL” provided Iran accepts the pending agreement.
The strategic waterway has been a source of severe global economic strain, as the war with Iran has prevented tankers from exiting the Persian Gulf. A full reopening would restore the free flow of oil, potentially easing the inflationary pressures that have driven up the costs of diverse consumer products worldwide.
“It looks as though we’re getting close to some sort of diplomatic resolution with the war,” said Peter Cardillo of Spartan Capital Securities. “There’s a real build-up of enthusiasm in the market,” he added.
In the bond market, the yield on the 10-year Treasury dropped to 4.35% from 4.43% on Tuesday.
International stock markets saw significant gains. Major indices surged across the globe, with jumps of 6.5% in Seoul and 1.2% in Hong Kong, while European markets in London and Paris rose by 2.2% and 2.9%, respectively.
