NEW YORK (AP) — Oil prices are sinking, and stock markets are bursting higher worldwide Wednesday with hopes that the United States and Iran are nearing a deal to allow ships to deliver crude from the Persian Gulf once again to their customers.
The price for a barrel of Brent crude oil, the international standard, sank 5.7 per cent to $103.61, down from more than $115 early this week.
It dropped as President Donald Trump said the Strait of Hormuz could be “OPEN TO ALL” if Iran accepts a reported agreement that the US president did not detail.
The strait has caused big trouble for the global economy because the war with Iran has blocked oil tankers from using it to exit the Persian Gulf.
A reopening could allow oil to flow freely again and remove some of the upward pressure on inflation that’s driven prices up for all kinds of products worldwide.
On Wall Street, the S&P 500 climbed 0.8% and was heading for another record. The Dow Jones Industrial Average was up 487 points, or 1 per cent, as of 9:35 am Eastern time, and the Nasdaq composite was 0.8 per cent higher.
Stock markets abroad had even bigger gains, and indexes jumped 6.5 per cent in Seoul, 1.2 per cent in Hong Kong, 2.2 per cent in London and 2.9 per cent in Paris.
Of course, hopes have risen several times already on Wall Street about a possible end to the war with Iran, only to quickly get dashed.
That could happen again, and oil prices pared some of their steepest losses from Wednesday morning. The price for a barrel of Brent briefly dove below $97 before pulling back above $100.
But Wall Street nevertheless latched onto several potentially encouraging signals.
Trump on Tuesday evening said he would pull back on his effort to reopen the Strait of Hormuz, potentially through forceful means.
And China’s foreign minister called for a comprehensive ceasefire following a meeting with Iran’s foreign minister.
That could be influential because of how closely tied Iran is to China economically and politically.
Plus, in the background, big U.S. companies continue to turn in much stronger profits for the start of 2026 than analysts expected.
That’s helping to support the stock market despite all the uncertainties about the war.
AMD helped lead the market with a surge of 19.3 per cent after it joined the list of big-name companies topping expectations for both profit and revenue.
CEO Lisa Su said the chip company benefited from continued growth from artificial-intelligence technology, which is demanding tremendous amounts of computing power from data centers.
AMD also said its revenue growth could accelerate in the current quarter to roughly 46 per cent from a year earlier.
Another company enmeshed in the AI industry, Super Micro Computer, rallied 14.2 per cent after likewise delivering stronger earnings than analysts expected.
CVS Health climbed 8.2 per cent after delivering better results for the first quarter than analysts expected and raising its financial forecasts for the full year.
Outside of earnings reports, companies with big fuel bills jumped on hopes that oil prices will continue to ease.
That included gains of 5.2 per cent for United Airlines, 5.5 per cent for Carnival and 5.2 per cent for Royal Caribbean.
