Wall Street Rallies as Oil Prices Ease on U.S.-Iran Talk Hopes

U.S. stocks rallied on Tuesday, buoyed by easing oil prices and growing anticipation for renewed talks between the United States and Iran, according to the Associated Press. The S&P 500 jumped 1.2%, positioning itself just 0.2% below its all-time high set in January. The Dow Jones Industrial Average rose 317 points, or 0.7%, and the NASDAQ Composite climbed 2% to 23639.08, per verified FRED data.

Diplomatic efforts to arrange a new round of talks between the U.S. and Iran are driving market optimism. If these talks succeed and lead to a resolution, investors are expected to refocus on corporate earnings. Positive trends in corporate earnings had propelled stock markets before the war’s onset, and analysts anticipate continued growth.

Lower oil prices are contributing to the improved outlook by reducing costs for businesses. The price of Brent crude to be delivered in June fell 4.6% to settle at $94.79 a barrel. While still higher than the pre-war price of approximately $70, it remains significantly below the peak of $119 reached during periods of heightened war-related anxiety.

According to the AP, recent data indicated that inflation at the wholesale level in the United States accelerated to 4% in March, which was still better than the 4.6% rate economists had anticipated. The International Monetary Fund (IMF) however, adjusted its inflation forecast for 2026 upward to 4.4% from 4.1% and also downgraded its forecast for global economic growth to 3.1% from the 3.3% it had projected in January.

Despite these concerns, strong profit reports are bolstering market confidence. Analysts are forecasting S&P 500 companies will report solid growth of more than 12% for the most recent quarter, according to FactSet. Strategists at Morgan Stanley have also raised their estimates for S&P 500 profits over the first six months of the year since the war began.

Individual companies reporting strong earnings saw corresponding gains in their stock prices. BlackRock gained 3%, and Citigroup rose 2.6% after exceeding analysts’ expectations. JPMorgan Chase, while also delivering a better-than-expected quarter, dipped 0.8% after CEO Jamie Dimon said bank officials cannot predict how the “increasingly complex set of risks” will play out given so much uncertainty.

In other company news, Amazon climbed 3.8% following its announcement to acquire Globalstar, a mobile satellite services company, for $90 per share. Globalstar’s stock subsequently jumped 9.6%. Moreover, software companies experienced a second day of gains, recovering from earlier losses caused by concerns about artificial intelligence. AppLovin rose 3.9%, and an ETF tracking the software industry added 1%.

These gains also aided the recovery of private-credit companies, which have lent money to software businesses and others potentially threatened by AI. Blue Owl Capital rose 8.5%, Ares Management climbed 5.6%, and Apollo Global Management rose 4.4%. Wells Fargo, however, reported weaker revenue than expected, causing its stock to drop 5.7%.

In overseas markets, indexes rose across Europe and Asia, with South Korea’s Kospi jumping 2.7%, and Japan’s Nikkei 225 rising 2.4%.

Treasury yields also decreased as the fall in oil prices alleviated some inflation pressure. The yield on the 10-year Treasury fell to 4.25% from 4.30% late Monday.