Wall Street surges, oil dives on Iran deal hopes; ASX set to jump
Stan Choe
Oil prices are falling and stock markets around the world are rallying on hopes that the United States and Iran are nearing a deal that would allow ships to once again deliver crude oil to their customers from the Persian Gulf.
The barrel price of Brent crude oil, the international standard, fell by 7.6 percent from $115 at the beginning of this week to $101.56. That rate fell after President Donald Trump said the Strait of Hormuz could be “open to everyone” if Iran agreed to a deal the US president did not detail.
The small strait caused major problems for the global economy because the war with Iran prevented oil tankers from using it to exit the Persian Gulf. Reopening could allow oil to flow freely again and remove the upward pressure on inflation that is driving up prices of all kinds of goods around the world.
On Wall Street, the S&P 500 was heading for a new record, up 1.2 percent. The Dow Jones Industrial Average rose 575 points, or 1.2 percent, and the Nasdaq composite rose 1.7 percent. The Australian share market is poised to move higher, with futures pointing to a 98-point, or 1.1 per cent, jump at the open at 4.54pm AEST. The ASX rose 1.3 per cent on Wednesday. The Australian dollar has jumped and is trading at 72.40¢.
Stock markets overseas posted even bigger gains, with indexes rising 6.5 percent in Seoul, 2.1 percent in London and 2.9 percent in Paris.
Of course, hopes on Wall Street for a possible end to the war with Iran rose several times, but were dashed each time. The same situation could happen again, and oil prices have regained some of their steepest losses since Wednesday morning. The price of a barrel of Brent rose above $100 after briefly falling below $97 after Trump threatened to start bombing Iran “at a much higher level and intensity” if it did not accept the deal.
But Wall Street still clung to potentially encouraging signals. Trump said Tuesday he was pausing efforts to forcibly reopen the Strait of Hormuz to commercial ships. China’s foreign minister called for a comprehensive ceasefire after a meeting with Iran’s foreign minister. This may be influenced by how closely tied Iran is to China economically and politically.
And meanwhile, major U.S. companies continue to post much stronger profits at the start of 2026 than analysts expected. This helps support the stock market despite all the uncertainties surrounding the war.
AMD led the market with a 17.6 percent increase after joining the list of major companies that exceeded expectations in terms of both profit and revenue. CEO Lisa Su said the chip company is benefiting from the continued growth of artificial intelligence technology, which requires massive amounts of computing power from data centers.
AMD also said revenue growth could accelerate this quarter to about 46 percent year-over-year.
Super Micro Computer, another company ensnared in the AI industry, also gained 18 percent after posting stronger earnings than analysts expected. Nvidia, the chip company that has become the poster child of the artificial intelligence boom, rose 4.7 percent and was the strongest force lifting the S&P 500 due to its massive size.
CVS Health rose 7.1 percent after delivering better-than-expected first-quarter results and raising its financial forecasts for the full year. Disney gained 7 percent after saying this Zootopia 2 The film helped attract people to the streaming business, parks and cruise ships, and turned a better-than-expected profit. Uber Technologies rose 7.5 percent after offering a higher booking forecast for the spring than analysts expected.
Outside of earnings reports, companies with large fuel bills have jumped in hopes that oil prices will continue to fall. This includes gains for United Airlines of 5.3 percent, Carnival of 5.9 percent and Royal Caribbean of 7.1 percent.
In the bond market, Treasury bond yields fell as falling oil prices eased the pressure on inflation. The yield on the 10-year Treasury note fell to 4.35 percent from 4.43 percent on Tuesday. This is a notable move for the bond market.
Lower yields could lower rates on mortgages and other types of loans to U.S. households and businesses, which could stimulate the economy. Low returns also tend to push up the prices of stocks and other types of investments. However, the 10-year yield remains well above the pre-war level of 3.97 percent.
On stock markets abroad, South Korea’s Kospi broke a record, rising above the 7000 level for the first time, thanks to big gains by AI winners including Samsung Electronics and SK Hynix.
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