U.S. stocks closed higher on Wednesday as investors reacted to signs that a possible pause in the war with Iran could be on the table, easing pressure on global energy markets and boosting confidence on Wall Street.
The S&P 500 climbed 0.5 percent, adding 35.53 points to close at 6,591.90. The Dow Jones Industrial Average rose 305.43 points, or 0.7 percent, finishing at 46,429.49, while the Nasdaq Composite advanced 167.93 points, or 0.8 percent, ending the day at 21,929.83.
Markets experienced volatility throughout the session, with the S&P 500 briefly rising as much as 1.2 percent before giving back some gains. Financial markets have been swinging sharply since the war began more than three weeks ago, as investors struggle to assess how long the conflict may last and what its broader economic impact could be.
Adding to the uncertainty, Iran’s Foreign Minister Abbas Araghchi told Iranian state television that Tehran had not entered negotiations to end the war and had no plans to do so.
Meanwhile, the conflict continued to escalate in the region. Iran launched additional attacks targeting Israel and Gulf Arab states, including a strike that sparked a major fire at Kuwait International Airport. The United States also increased its military presence by deploying paratroopers and additional Marines to the region.
Despite the tensions, global markets showed signs of optimism. Major stock indexes rose more than one percent in London, Paris and Shanghai, while Japan’s Nikkei 225 surged 2.9 percent.
Oil prices eased on hopes that the conflict could cool and allow energy shipments from the Persian Gulf to resume more normally. Brent crude for June delivery fell 3 percent to settle at 97.26 dollars per barrel.
The war has disrupted shipping through the Strait of Hormuz, a critical energy corridor off Iran’s coast. Many oil tankers remain stranded outside the passage, which previously drove Brent crude close to 120 dollars per barrel at times.
In the bond market, U.S. Treasury yields declined, offering potential relief for borrowers. The yield on the 10-year Treasury fell to 4.32 percent from 4.39 percent a day earlier, although it remains higher than the 3.97 percent level recorded just before the war began.
Gold prices also rebounded, rising 3.4 percent to settle at 4,552.30 dollars per ounce. Earlier in the month, gold briefly approached 5,400 dollars before retreating as rising bond yields made interest-bearing investments more attractive.
Several companies also drove market movements on Wall Street.
Shares of Arm Holdings jumped 16.4 percent after the British chip designer unveiled new processors aimed at data centers and artificial intelligence applications.
Robinhood Markets rose 5 percent after its board approved a stock buyback program worth up to 1.5 billion dollars, aimed at returning value to shareholders.
Terns Pharmaceuticals climbed 5.7 percent after Merck announced plans to acquire the oncology-focused company in an all-cash deal valued at 6.7 billion dollars. Merck’s own shares gained 2.6 percent following the announcement.
Not all companies enjoyed gains. On Holding, the Swiss maker of On running shoes, plunged 11.2 percent after its chief executive Martin Hoffmann announced plans to step down.
In Asia, Pop Mart International Group dropped sharply in Hong Kong, tumbling 22.5 percent despite reporting strong growth in profits and revenue, which nevertheless fell short of analysts’ expectations.
Shares of Alphabet, the parent company of YouTube, and Meta Platforms, which owns Instagram, remained largely stable after a jury ruled against the companies in a landmark lawsuit attempting to hold social media platforms responsible for harm to children using their services. Alphabet rose 0.2 percent while Meta gained 0.3 percent.