Dow jumps 448 points on Iran deal hopes, AI rally lifts stocks

Wall Street’s main indexes opened higher on Wednesday, extending a strong run fueled by optimism over a potential US-Iran peace agreement and continued enthusiasm around artificial intelligence-driven growth.

Stock indices advanced after reports suggested Washington and Tehran were nearing a deal to end the conflict.

The Dow Jones Industrial Average rose 448 points, or 0.91%, while the S&P 500 gained 0.74%.

The Nasdaq Composite led the move, climbing 0.85%.

According to Axios, citing sources, the US and Iran were close to an agreement that could include a moratorium on nuclear enrichment.

An Iranian foreign ministry spokesperson also told CNBC that Iran was evaluating a US proposal aimed at resolving the conflict.

However, uncertainty remained.

President Donald Trump later indicated that a deal was not guaranteed, calling it a “perhaps, a big assumption” that Iran would agree to the proposal. Equity futures retreated slightly from earlier highs following his remarks.

“If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before,” the president wrote in a post on Truth Social.

Oil prices tumble as geopolitical tensions ease

Energy markets reacted sharply to the prospect of de-escalation.

Oil prices fell significantly as traders reduced exposure, anticipating a potential end to the conflict.

West Texas Intermediate futures dropped 10%, trading just above $91 per barrel, while international Brent crude declined about 9% to near $100.

The decline in oil prices followed reports that the two sides were working toward a one-page memorandum that would formally end hostilities and initiate a 30-day negotiation period.

The agreement could include reopening the Strait of Hormuz, limiting Iran’s nuclear program, and lifting US sanctions.

Trump also said late Tuesday that he is pausing “Project Freedom,” the US initiative to guide ships out of the Strait of Hormuz.

He cited “the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran" as the reason behind the move.

AI momentum continues to lift equities

Beyond geopolitics, the rally in equities has been underpinned by strong corporate earnings and sustained investor enthusiasm for artificial intelligence.

Chipmaker Advanced Micro Devices (NASDAQ: AMD) surged as much as 18% after issuing an upbeat outlook for the second quarter and reporting first-quarter results that beat expectations on both revenue and profit.

The gains spilled over into the broader semiconductor sector, with the VanEck Semiconductor ETF rising 4% and Intel adding about 4%.

Super Micro also jumped 13% following a stronger-than-expected forecast.

Major technology stocks also contributed to gains. Alphabet rose 1.5%, narrowing the gap with Nvidia in market value, while Nvidia itself climbed 2%.

Arm Holdings advanced 11% ahead of its quarterly results.

Economic data also pointed to underlying resilience.

The ADP National Employment Report showed US private-sector employment rose by 109,000 jobs in April, above expectations of 99,000.

While markets continue to rally on optimism around AI and easing geopolitical tensions, investors remain closely focused on developments in the Middle East and the durability of earnings growth as key drivers for the next phase of market direction.