US stocks today: US stocks advance as investors bet on Iran war de-escalation

Wall Street's main indexes closed higher on Wednesday as oil prices fell while Iran reviewed a U.S. proposal to end the war in the Middle ‌East, feeding investor hopes for de-escalation in the fourth week of a war that has disrupted global energy flows and stoked inflation concerns.

The Dow Jones Industrial Average rose 304.51 points, or 0.66%, to 46,428.57, the S&P 500 gained 38.56 points, or 0.59%, to 6,594.90, and the Nasdaq Composite advanced 167.93 points, or 0.77%, to 21,929.83.

While Abbas Araqchi, Iran's foreign minister, said top authorities were reviewing proposals, he added that exchanges of messages through mediators do not equate to negotiations and that Tehran has no intention to hold talks with the U.S.


Initially, Iran said it considered U.S. proposals delivered by Pakistan as excessive and demanded sovereignty over the Strait of Hormuz.

With the mixed messages leading to choppy equity trading during the day, Michael James, ⁠equity sales trader at Rosenblatt Securities, said: “There are a lot of frayed nerves out there with sentiment and headlines driving a lot of the market action.”

Any signs of communication between the countries made investors hopeful, following signals that Washington has been seeking a ceasefire and restoration of shipping through the crucial Strait of Hormuz, which about 20% of global oil shipments pass through.

"There is optimism that the proposal and counter-proposal are setting the stage for more negotiations," said Gene Goldman, chief investment officer at Cetera Investment Management.

Until there is clarity on when the war might end, Goldman said he expects "volatility to remain elevated given the impact of higher oil prices on inflation."

During Wednesday's session, energy (.SPNY), opens new tab was the weakest of the S&P 500's 11 major industry sectors. Strong gainers included materials (.SPLRCM), opens new tab and consumer discretionary (.SPLRCD), opens new tab.

With oil prices settling down more than 2%, shares in companies that depend heavily on fuel were rallying. Cruise operators including Norwegian Cruise Line (NCLH.N), opens new tab gained sharply along with airlines, with the S&P Composite 1500 Passenger Airlines index (.SPCOMAIR), opens new tab outperforming the broader market.

The small-cap Russell 2000 index (.RUT), opens new tab hit a two-week high during the trading session.

U.S.-listed shares of Arm rallied sharply after the company ⁠unveiled a new AI data center chip that is expected to bring billions of dollars in revenue. It was the biggest gainer in the Philadelphia Semiconductor Index (.SOX), opens new tab. Other rallying chipmakers included Advanced Micro Devices (AMD.O), opens new tab and Intel (INTC.O), opens new tab. Nvidia (NVDA.O), opens new tab shares also rose.

Destiny Tech100 (DXYZ.N), opens new tab surged after a report that SpaceX aims to file its IPO prospectus as soon as this ⁠week. SpaceX is the fund's largest equity holding.

Other space companies also rose including Rocket Lab (RKLB.O), opens new tab, Intuitive Machines (LUNR.O), opens new tab and EchoStar (SATS.O), opens new tab.

The oil price spike has revived inflation worries, complicating the interest-rate outlook of central banks. Markets are no longer pricing in any easing from the Federal Reserve this year, according to CME Group's FedWatch Tool, compared ⁠with the two cuts that were expected before the war broke out.

Among other movers, U.S.-listed shares of JD.com and Alibaba rose after Chinese state media and the regulator urged the food-delivery platform industry to end a price war. Robinhood Markets (HOOD.O), opens new tab rallied after the trading platform announced a new $1.5 billion share buyback program.