US stocks opened higher on Wednesday, extending momentum from the previous session’s sharp rally, as investors grew increasingly hopeful that the conflict between the United States and Iran could be nearing an end.
Markets were buoyed by comments from Donald Trump and Secretary of State Marco Rubio, who indicated that the war could soon wind down, potentially through direct talks with Iranian leadership or a de-escalation without a formal agreement.
The market reaction followed an unverified report indicating that Iranian President Masoud Pezeshkian may be willing to pursue an end to the conflict, provided certain conditions are met.
Earlier this month, he had expressed a similar stance in a post on X, stating that the “only way to end this war … is recognizing Iran’s legitimate rights, payment of reparations, and firm int’l guarantees against future aggression.”
Stocks rise as geopolitical tensions ease
The S&P 500 index rose 0.76%, while the Nasdaq 100 gained nearly 1%. The Dow Jones Industrial Average added 322 points, or 0.7%, giving a positive start to April.
The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, fell to a more than one-week low, reflecting easing investor anxiety.
The optimism follows Tuesday’s surge, when Wall Street’s main indexes posted their biggest one-day gain in nearly a year.
However, despite the rebound, the S&P 500 and Nasdaq still recorded their steepest monthly declines in a year, while the Dow saw its largest drop since September 2022.
Oil retreats as hopes for ceasefire grow
Oil prices, which had surged since the conflict began in late February, moved lower on Wednesday as prospects for peace improved.
West Texas Intermediate futures declined about 1% to just above $100 per barrel, while Brent crude slipped around 2% to above $102.
Earlier in the session, oil prices had fallen as much as 3%, amid expectations that shipping through the Strait of Hormuz—a critical global oil transit route—could resume if tensions ease.
Energy stocks tracked the decline in crude prices, with shares of Exxon Mobil and Chevron falling 3.1% and 2.8%, respectively.
Economic data and corporate moves in focus
Economic indicators offered a mixed but steady backdrop.
Private payrolls increased in March, according to ADP, while a Commerce Department report showed retail sales rose 0.6% in February, slightly above expectations.
Investors are now looking ahead to further labor market data, though US markets will be closed on Friday for Good Friday.
Monetary policy expectations have also shifted. Markets have largely priced out interest rate cuts from the Federal Reserve this year, as conflict-driven energy price pressures cloud the inflation outlook.
In corporate news, shares of Nike fell 11.7% after forecasting a surprise drop in fourth-quarter sales. RH plunged 22.1% after issuing a weak revenue outlook, while nCino surged 21.3% on strong guidance and a $100 million share buyback announcement.
Investors are also awaiting further geopolitical clarity, with Trump scheduled to address the nation later in the day, potentially offering additional direction for markets navigating a volatile global landscape.
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