Stocks Rip Higher, Dow Jumps 600 as Hopes Build for US–Iran Breakthrough

CNBC, Reuters, Market Watch, and the Wall Street Journal contributed to this report.

Wall Street leaned into optimism – hard.

Stocks rallied Wednesday on fresh signs that the US and Iran might be inching toward a deal to wind down their conflict. The reaction was swift: the Dow Jones Industrial Average surged more than 600 points, while the S&P 500 and Nasdaq Composite both closed at record highs.

The S&P 500 climbed 1.46% to finish above 7,300 for the first time. The Nasdaq jumped just over 2%, and the Dow added 612 points, closing in on the 50,000 mark.

The spark came from a report suggesting Washington and Tehran are getting close to an agreement – one that could include limits on nuclear activity and, more importantly for markets, an end to the fighting. Iranian officials confirmed they’re reviewing a US proposal.

Investors didn’t wait for signatures.

Oil prices dropped sharply as traders dialed back worst-case scenarios. US crude fell more than 7% to about $95 a barrel, while Brent crude slid nearly 8%. Lower energy costs tend to lift equities, especially when fears of supply disruptions start to fade.

There’s still plenty of uncertainty. Donald Trump poured some cold water on the idea of a done deal, calling it a “big assumption” that Iran would agree. He also warned that if talks collapse, the conflict could escalate again – sharply.

Markets noticed. Stocks briefly pulled back after his comments before regaining footing.

Earlier, Trump said he would pause “Project Freedom,” the US effort to escort ships through the Strait of Hormuz, pointing to progress in negotiations. That added to the sense that tensions, at least for now, might be cooling.

Beyond geopolitics, earnings are still doing heavy lifting. Advanced Micro Devices was a standout, soaring nearly 19% after upbeat guidance and a strong quarter. The broader chip sector followed, with funds tracking semiconductors jumping and Intel also moving higher.

The bigger picture? Investors are betting that a potential ceasefire – or even a pause – could take pressure off global growth just as corporate profits keep surprising to the upside.

It’s a fragile setup. But for now, the market is choosing to believe the deal might actually happen.