US stocks end higher as oil, rate fears ease on hopes of progress in Iran talks

Major US stock indexes rallied Wednesday as oil prices and Treasury yields fell amid growing optimism over a possible easing of Middle East tensions.

The Dow Jones Industrial Average jumped 1.31%, or 645 points, to end at 50,009.35.

The S&P 500 rose 1.08%, or 79.36 points, to 7,432.97, and the tech-heavy Nasdaq Composite gained 1.55%, or 399.65, to end the day at 26,270.36.

The Volatility Index (VIX), often referred to as the market’s “fear index,” fell 3.43% to 17.44.

Risk sentiment improved after US President Donald Trump told reporters that Washington was in the “final stages” of negotiations with Iran, raising hopes that geopolitical tensions could ease and reduce pressure on global energy markets.

He also said a deal would be made or Washington would “do some things that are a little bit nasty."

Oil prices declined sharply following the remarks. US benchmark West Texas Intermediate crude fell 5.66% to settle at $98.26 per barrel, while international benchmark Brent crude dropped 5.63% to $105.02 a barrel.

The pullback in crude prices helped ease concerns that higher energy costs could reignite inflation and force the Federal Reserve to keep monetary policy tighter for longer.

US Treasury yields also retreated Wednesday, with the 10-year yield falling more than 8 basis points to around 4.57%. The 30-year yield declined by around 6 basis points.

Bond yields had pressured equity markets in recent sessions after the 30-year Treasury yield reached its highest level since 2007 and the 10-year yield approached multi-year highs.

Minutes from the Fed’s latest policy meeting showed that officials remained concerned about inflation risks stemming from elevated energy prices, Middle East uncertainty, and tariffs.

“A majority of participants highlighted, however, that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent,” the minutes said.

Investors also awaited first-quarter earnings from Nvidia, a key test for the artificial intelligence-driven rally in technology shares. Nvidia shares were up around 2% before the report.

European stocks

European stocks also saw positive figures, with the pan-European Stoxx Europe 600 index rising 1.46% to close at 620.29 points.

Germany’s DAX 40 gained 1.38% to 24,737.24, while the UK’s FTSE 100 increased 0.99% to 10,432.34.

France’s CAC 40 added 1.7% to finish at 8,117.42, Italy’s FTSE MIB 30 advanced 1.71% to 49,181.66, and Spain’s IBEX 35 climbed 2.16% to 18,051.70.