Stocks jumped on Wednesday after oil prices fell following the latest developments in the war with Iran.
The Dow Jones Industrial Average rose by 304 points, or 0.66%. The S&P 500 and the Nasdaq Composite advanced by 0.54% and 0.77%, respectively.
The Associated Press, citing unnamed officials in Islamabad, reported that Iran had received a 15-point proposal from the US to end the war. The New York Times first reported that the US had sent Iran a peace plan. The plan was delivered through Pakistan, the outlet said, citing two unnamed officials.
Iranian state media reported that the Middle Eastern country rejected the US ceasefire offer, instead putting forward a five-point plan that includes giving Iran control of the Strait of Hormuz.
Oil prices were under pressure on Wednesday following the events. West Texas Intermediate crude futures lost 2.2% to close at $90.32 a barrel. International Brent also fell by 2.17% to close at $102.22. Government bond yields also tumbled with oil prices and prospects for peace.
Certainly, the two countries seem very far apart. The Wall Street Journal reports that the US is deploying the Army’s 82nd Airborne Division to the Middle East.
The report on the peace plan comes after Trump said earlier on Tuesday that the US was “currently negotiating” with Iran. He added that Tehran was “talking sense” and suggested that it was eager for a peace deal.
The war has caused huge volatility in stocks this week. On Tuesday, the market gave back some of its gains from Monday, when all three averages rose more than 1% after Trump wrote in a post on Truth Social that the US and Iran had “very good and productive talks about the full and total resolution of our hostilities in the Middle East,” SEEbiz reports. However, Iranian state media denied reports of these direct talks between the two countries.
“While questions remain about who in Iran can limit military activity, as well as what will satisfy Israel’s interests, the market appears to be expressing a view that it wants more recovery from here,” JPMorgan’s trading department said in a note.
“Also, it is unclear whether Iran will abandon previous demands, including security guarantees against future aggression and reparations/compensation for losses incurred during this conflict.”
Gains in technology stocks supported the broader market on Wednesday, with shares of Nvidia, AMD and Intel all higher. Stocks that would benefit from a solid economy also rose, with financials and industrials firms in the green.
