Stocks and bonds advanced on Wednesday, while oil prices declined, based on reports that the US sent a 15-point peace plan to Iran. This came as a result of traders reacting to mixed signals emanating from Washington and Tehran. US stocks advanced, treasury yields declined, and crude oil prices fell after a sharp run-up during the conflict.
US stocks opened higher after reports emerged that Washington had sent Tehran a proposal to end the conflict. The S&P 500 rose about 0.8% by 10:37 a.m. in New York, while the Nasdaq 100 added 1.1%. The Dow Jones Industrial Average also climbed 0.8%, showing a broad move into risk assets.
European markets also advanced. The Stoxx Europe 600 rose 1.4%, while the MSCI World Index added 1.1%. Investors appeared to focus on the chance of a pause in hostilities, even after reports indicated Iran had rejected the ceasefire proposal and kept up attacks on Israel and Gulf Arab states.
Market participants continued to react to updates tied to the conflict. Elias Haddad of Brown Brothers Harriman & Co. said, “Markets are positioning for a conflict resolution, despite lingering strategic ambiguity.” He added that Iran’s response to the US push for de-escalation would determine whether investor fears had peaked or not.
Bespoke Investment Group also pointed to the lack of clarity around the talks. Its strategists said, “There’s really no way to know at this point what the facts are regarding the state of negotiations, so expect more whipsaw action as things continue to progress.” The comment reflected the unstable mood across global markets.
Oil prices dropped after reports on the peace plan raised hopes that the conflict might cool. West Texas Intermediate crude fell 4% to $88.64 a barrel, while Brent crude moved down to around $100. The decline followed a strong rally in recent weeks, with US crude having gained more than 30% since the war began.
The oil markets eased despite the uncertainty around the Strait of Hormuz. Reports noted that traffic through the waterway had slowed sharply during the conflict. The route is a key passage for global oil flows, and any disruption there continues to keep energy markets on edge.
At the same time, gold rose 2% to $4,563.58 an ounce. The gain showed that some investors were still seeking protection while buying equities and bonds. Bitcoin also moved higher, rising 1.9% to $71,388.51, while Ether added 1.5% to $2,181.16.
Currency markets were more measured. The Bloomberg Dollar Spot Index was little changed. The euro slipped 0.2% to $1.1579, the British pound fell 0.3% to $1.3372, and the Japanese yen weakened 0.3% to 159.11 per dollar.
Alongside the geopolitical story, several company updates supported trading activity. Arm Holdings jumped after saying it would sell its own chips for the first time. The company projected that the move could generate about $15 billion a year within five years. Arm shares surged about 16%, making it one of the top performers in the Nasdaq 100.
Chip stocks also gained ground. NVIDIA rose 2%, while AMD and Intel each advanced 5%. Tesla and Amazon also climbed more than 2%, adding to support for major US indexes during the session.
Meta Platforms cut several hundred jobs across teams, including sales, recruiting, and Reality Labs hardware.
Merck agreed to buy Terns Pharmaceuticals for $6.7 billion, giving it access to a leukemia treatment pipeline.
Chewy forecast annual sales above analyst estimates, while Barclays reduced some lending activity to smaller borrowers after losses tied to recent collapses.
Even with Wednesday’s rebound, traders were focused on the next headline from the Middle East. Markets moved higher on hopes tied to diplomacy, yet the path toward any ceasefire is uncertain.
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