Oil prices took a dive on Wednesday, fueling a global stock market surge amid optimism about a potential agreement between the United States and Iran to resume oil shipments from the Persian Gulf. The price of Brent crude oil plummeted by 7.8% to slightly above $100 per barrel, down from over $115 earlier in the week.
The drop came as U.S. President Donald Trump hinted at the possibility of reopening the Strait of Hormuz to all vessels if Iran accepts an undisclosed deal. The strait’s closure due to the conflict with Iran has disrupted global oil transportation, causing inflationary pressures on a wide range of products.
Wall Street saw significant gains, with the S&P 500 climbing 1.5% to hit a new high, the Dow Jones Industrial Average surging by 612 points, and the Nasdaq composite reaching a record high, all signaling positive investor sentiment. Similarly, Canada’s S&P/TSX composite index rose by about 1.2%.
International markets also experienced robust growth, with Seoul’s index soaring by 6.5%, Paris by 2.9%, and London by 2.1%. Despite this optimism, concerns linger about the volatility of the situation with Iran, as evidenced by fluctuating oil prices that briefly dipped below $97 before rebounding above $100 following Trump’s threats of escalated military action.
Amidst these developments, several large U.S. corporations reported better-than-expected profits for the first quarter of 2026, bolstering market confidence. Notably, chip giant AMD surged by 18.6% after exceeding profit and revenue forecasts, emphasizing the role of artificial intelligence technology in driving growth. Other AI-related companies like Super Micro Computer and Nvidia also saw substantial gains, contributing to the market’s positive momentum.
Furthermore, companies reliant on fuel costs, such as airlines and cruise operators, saw their stocks rise in anticipation of easing oil prices. This optimism also reflected in the bond market, where Treasury yields declined as lower oil prices alleviated inflation concerns, with the 10-year U.S. Treasury yield decreasing from 4.43% to 4.35%.