Stocks Reach New Heights Amid Tech Sector Earnings, Oil Prices Decline on Iran Deal Hopes

Global Markets Surge to Fresh Records as US and Iran Close in on Agreement

Stocks around the world surged to fresh records on Wednesday, while oil prices dropped significantly, following reports that the United States and Iran are nearing an agreement to end their conflict. Momentum in AI-driven trades also accelerated, driving key stocks to new heights.

Brent crude, the global benchmark, plummeted to just below $100 per barrel, its lowest level in two weeks, as the importance of oil passing through the Strait of Hormuz became a major concern. As a result, Brent settled 7.83% lower at $101.27 a barrel. Meanwhile, U.S. West Texas Intermediate crude fell approximately 7%, to $95.08.

On Wall Street, the steady growth of U.S. corporate profits continued to propel stocks to record levels. The Dow Jones Industrial Average added 1.24%, while the S&P 500 rose 1.46%, and the Nasdaq Composite jumped 2%, both reaching fresh highs.

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In Europe, the STOXX 600 index extended its gains, rising 2.2% after climbing 0.7% a day earlier. MSCI's All-Country World Index climbed 1.64% to a new record.

The U.S. dollar, which has served as a safe haven during the Iran conflict, dropped 0.3% against its major peers, reflecting investor hopes for a possible deal. The yen rose by as much as 1.8% against the dollar, triggering speculation of another round of intervention.

In the bond market, yields on government bonds fell in tandem with oil prices as traders reduced their bets on central bank rate hikes. The 10-year U.S. Treasury yield fell 6.4 basis points to 4.352%.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Although stocks have rallied sharply, volatility in energy and bond markets could weigh on global growth. Oil prices are approximately 35% higher than they were when the conflict began in late February, while 10-year Treasury yields are around 40 basis points higher.

The AI rally continued to drive global stocks, with shares in chipmaker Advanced Micro Devices jumping around 18.6% after forecasting second-quarter revenue above Wall Street expectations. Rival Intel also rose to a record high, while chip designer Arm Holdings and chipmaker Qualcomm similarly surged.

The broadest index of Asia-Pacific shares outside Japan jumped 3.2%. Samsung Electronics surged 14%, surpassing a $1 trillion market value and overtaking Berkshire Hathaway.