Oil plunges and stocks soar: The 5 most notable market moves as hopes for an Iran peace deal grow
Markets are getting in position for the Iran war to soon end.
A report from Axios early Wednesday said that the US and Iran could are nearing a peace deal. Markets have been eyeing a possible deal for weeks, though progress on a resolution has been unclear, with the ceasefires that’s been in place since early April at times appearing near collapse.
President Donald Trump teased a potential end to the conflict in a post on Truth Social on Wednesday, but also threatened to take further military action if Iran rejects the latest proposal.
“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran,” Trump wrote on the social media platform on Wednesday.
Here were the biggest swings in markets on Wednesday as traders looked toward a potential end to the conflict.
Oil prices and energy stocks tank
Oil prices tumbled. Brent crude, the international benchmark, plunged as much as 9% to trade around $97 a barrel, before edging back above $100 . West Texas Intermediate crude also dropped 7% to trade around $94 a barrel.
Energy stocks were among the stock market’s big losers, moving in the opposite direction of the broader rally in the stock market. The State Street Energy Select Sector SPDR ETF slid nearly 4% in the early morning.
Notable moves in the sector:
US stocks jump
Major indexes rallied, with investors, already pumped up by a strong earnings season, pushing stocks further into record territory. The Dow advanced more than 550 points midmorning, while the tech-heavy Nasdaq 100 was up more than 1%.
The tech sector has climbed in recent weeks amid strong earnings and fresh dealmaking in the semiconductor space. Intel spiked more than 15% this week on a strong earnings beat and reports it was speaking to Apple for a chipmaking deal. AMD and Super Micro also rallied on Wednesday after crushing analyst estimates.
Notable moves in the sector:
Airline stocks rebound
Sentiment perked up in the travel industry, which has struggled since the start of the Iran war. The US Global Jets ETF jumped 4%. The fund had entered a bear market in March, losing as much as 24% from its peak in early February.
Soaring jet fuel prices are a major overhang for the space, speeding the collapse of Spirit Airlines over the weekend, while other carriers have canceled flights and slashed routes heading into the summer travel season.
Notable moves in the sector:
Emerging markets get a boost
Investors continued to pour more money into emerging markets, one area that was expected to outperform at the start of the year, but tanked as conflict escalated in the Middle East.
Emerging economies in Asia have been hit particularly hard by the war, and many countries in the region have implemented some of the strongest energy rationing rules while the Strait of Hormuz has been closed to oil flows.
The iShares MSCI Emerging Markets ETF rose 2% on Wednesday. The fund had fallen as much as 13% from its pre-war peak, but has rallied in recent weeks as hope for a peace deal as grown.
Bond yields sink
Bond yields tumbled as investors hoped that an end to the war could mean inflation won’t spiral out of control. The major fear for the market during the war has been that higher oil prices could lift inflation throughout the economy, which could keep interest rates higher-for-longer.
Treasury yields fell across the maturity ladder on Wednesday, with the benchmark 10-year yield pulling back five basis points to trade around 4.3%.
The 30-year government bond yield, which surpassed 5% earlier in the week, slid to 4.94%.
The odds that the Fed will hike rates in 2026, which had become a more prominent tail risk in the last week, cooled to 18% on Wednesday, down from 29% the day before, according to the CME FedWatch tool.