Wall Street delivered one of its strongest sessions of the year on Wednesday as reports emerged that the United States and Iran are closing in on a deal to end the war. The news sent the S&P 500 to its first-ever close above 7,300, pushed the Nasdaq to a fresh all-time high, and drove the Dow Jones Industrial Average up more than 600 points in a single session.
The S&P 500 climbed 1.46% to close at 7,365.12. The Nasdaq Composite surged 2.02% to finish at 25,838.94. The Dow added 612.34 points, or 1.24%, ending at 49,910.59. Both the S&P 500 and Nasdaq closed at record highs.
What Sparked the Rally
The catalyst came from Axios, which reported, citing multiple U.S. officials and sources briefed on the matter, that the White House believes it is nearing a one-page, 14-point memorandum of understanding with Iran. The proposed agreement would not only end the war but also establish a framework for more detailed nuclear talks, including a moratorium on nuclear enrichment. An Iranian foreign ministry spokesperson confirmed to CNBC that Tehran was evaluating a U.S. proposal toward a resolution.
Markets pulled back from their intraday highs after President Donald Trump added caution to the optimism. Writing on Truth Social, he called it “a perhaps, a big assumption” that Iran would agree to the terms. He warned that if negotiations fail, “the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.”
Trump had also announced late Tuesday that he was pausing “Project Freedom,” the U.S. plan to escort commercial ships through the Strait of Hormuz, citing what he described as great progress toward a complete and final agreement with Iranian representatives.
Oil Drops Sharply
Oil prices cratered on the prospect of easing hostilities. West Texas Intermediate futures fell 7.03% to settle at $95.08 per barrel. International Brent crude lost 7.83%, closing at $101.27. The Strait of Hormuz, through which a significant share of global oil supply flows, has been a key flashpoint throughout the conflict.
Bill Northey, investment director at U.S. Bank Asset Management Group, said a resolution would deliver wide-ranging economic benefits. “If we truly achieve a point in time where the hostilities begin to slow down or stop in their entirety, and we see the reopening of the Strait of Hormuz, this will allow some of those most economically sensitive and hardest hit regions like Southeast Asia and Europe to potentially avoid their own economic difficulties,” he said. He described the setup as one that could produce a meaningful snapback in global equity markets.
Earnings Season Adds Fuel
Beyond geopolitics, a robust earnings season has been providing independent support for stocks. Chipmaker Advanced Micro Devices led Wednesday’s gains, soaring 18.6% after beating first-quarter expectations on both revenue and profit while issuing a bullish outlook for the second quarter. The broader semiconductor sector followed, with the VanEck Semiconductor ETF jumping 5% and Intel gaining 4.5%.
Samantha McLemore, founder of Patient Capital Management, told CNBC’s Closing Bell that the bull market has further to run. “It’s a secular bull market. People have been talking about whether we’re in a bubble for over a year now, and that’s kept a lid on valuations. We’ve mostly just seen the moves track the earnings,” she said.
Thursday Futures and Early Movers
The positive tone carried into Thursday morning. S&P 500 futures edged up 0.1%, Dow futures added 44 points, and Nasdaq 100 futures hovered near the flatline as traders continued monitoring Iran developments ahead of the open.
Several individual names posted strong premarket moves. DoorDash surged 10% after the food delivery company issued strong second-quarter order guidance. Fortinet climbed 16% after raising its full-year billings forecast. Peloton beat Wall Street revenue expectations in its fiscal third quarter, driven by better-than-expected equipment sales and subscription revenue, with free cash flow up nearly 60%. Shares rose close to 4%.
With geopolitical risk gradually easing and corporate earnings continuing to beat forecasts, traders are watching closely to see whether the S&P 500 can hold above the 7,300 level and extend its record run.
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