Stocks Reach New Records as Oil Prices Decline Amid US-Iran Diplomatic Developments

Market Update: Wall Street Stocks Inch to All-Time Highs Amid U.S.-Iran Peace Negotiations

New York, May 27 - Wall Street stocks showed little conviction on Wednesday, inching to all-time closing highs as investors assessed developments in U.S.-Iran peace negotiations. The S&P 500 and the Nasdaq ended only slightly higher, with a pullback in chip stocks capping their gains, while the Dow ended more decisively higher.

Key Market Indicators

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The fragile truce between the United States and Iran remained intact, offering hope that a deal could be imminent. Iran's state TV said it obtained a draft of an unofficial framework of an initial understanding between Washington and Tehran toward ending the conflict, which would entail Iran restoring shipments through the crucial waterway to pre-war levels within a month.

U.S. Treasury yields eased on hopes that the months-long blockade of the Strait of Hormuz could soon be lifted, easing fears that the resulting energy price squeeze could metastasize into higher inflation, and in turn, tighter monetary policy. The yield on benchmark U.S. 10-year notes fell 1.4 basis points to 4.477%, from 4.491% late on Tuesday.

Oil Prices Retreat as Investors Assess U.S.-Iran Deal

Crude oil prices dropped on signs of progress in a U.S.-Iran deal to reopen the Strait of Hormuz. U.S. crude fell 5.55% to settle at $88.68 per barrel, while Brent settled at $94.29 per barrel, down 5.31% on the day.

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Dollar Holds Steady, Yen Slides

The dollar held steady after Tuesday's uptick, while the yen slid to its weakest level against the greenback since late April, brushing against levels that triggered an official Japanese intervention last month as investors eyed a potential flare-up of turmoil in the Middle East. The dollar index rose 0.1% to 99.20, with the euro up 0.01% at $1.1629.

Gold Prices Decline to Two-Month Low

Gold prices declined to a two-month low as war-related inflation increased the odds that the Fed could hike interest rates this year. Spot gold fell 1.19% to $4,452.38 an ounce.

Cryptocurrencies Fall

Bitcoin fell 1.31% to $75,025.00, while Ethereum declined 0.97% to $2,055.62.

The Commerce Department's second take on first-quarter GDP and its broad-ranging Personal Consumption Expenditures (PCE) report, which will include the Fed's preferred inflation gauge, is scheduled for Thursday. Analysts expect year-on-year headline and core inflation growth of 3.8% and 3.3%, respectively, well above the central bank's annual 2% target.