Wall Street Hits Records as Iran Deal Hopes Drive Oil Below $100

Global markets erupted in relief Wednesday after credible reports signaled the United States and Iran are nearing a framework agreement to end the conflict that has strangled world energy supplies since late February. Brent crude plunged more than 10 percent to $98.20 a barrel, its lowest level since April 22 and the sharpest single-day drop in a month. West Texas Intermediate fell even harder, shedding more than 10 percent to trade near $91. The sell-off reflected growing expectations that the Strait of Hormuz, which carries one-fifth of global oil, could soon reopen.

The moves came after Axios reported that the White House believes it is close to a one-page memorandum of understanding with Tehran. The document would establish a basis for more detailed nuclear negotiations. A Pakistani source deeply involved in the mediation confirmed the assessment to Reuters, describing the next 48 hours as critical. Iran’s Revolutionary Guards Navy issued its first public response, stating that safe passage through the strait would resume under new procedures once American threats ceased. The statement thanked shipowners for respecting Iranian rules during the blockade.

President Donald Trump, whose aggressive posture helped ignite the current confrontation, hailed “great progress” toward what he called a “final agreement.” He announced a temporary pause in the Pentagon’s “Project Freedom” escort operation for commercial vessels, though he insisted the U.S. blockade of Iranian ports would stay in place. The announcement capped weeks of escalating military actions, including the destruction of Iranian small boats earlier this week. That fighting had turned a manageable dispute into a full-blown energy shock.

The war has exacted a steep price. Global inventories of crude, gasoline, and distillates have fallen sharply as refiners scrambled to offset the lost flows through Hormuz. U.S. crude stockpiles dropped for a third straight week, according to American Petroleum Institute data. Brent had spiked last week to its highest level since March 2022. Wednesday’s reversal offered the first clear sign that the self-inflicted wound on the world economy might soon heal, but only after months of higher fuel costs passed on to consumers everywhere.

Stock markets responded with unrestrained enthusiasm. Europe’s STOXX 600 surged 2.6 percent while the MSCI All-Country World Index hit another record. S&P 500 futures climbed nearly 1 percent on top of the previous day’s gains. The U.S. dollar fell 0.55 percent as the safe-haven trade unwound. Government bond yields slid in tandem with oil. Michael Brown, senior research strategist at Pepperstone, called the moves “punchy,” noting that traders were “front-running a positive outcome” rather than waiting for confirmation.

The rally also drew fresh oxygen from the artificial intelligence boom that continues to defy geopolitical turbulence. Nvidia and glassmaker Corning announced a sweeping partnership to build three dedicated optical-fiber factories in North Carolina and Texas. The facilities, expected to generate at least 3,000 jobs, will increase Corning’s U.S. optical manufacturing capacity tenfold and support the explosive demand for high-speed connections inside AI data centers. Corning shares jumped 14 percent; Nvidia rose nearly 3 percent. The deal underscores how AI infrastructure is shifting from copper wiring to optical glass, a transition Nvidia’s Jensen Huang has described as essential for the next phase of the buildout.

Corning, a 175-year-old company that has reinvented itself for the AI age, has seen its stock more than triple in the past year. Meta’s commitment of up to $6 billion to expand Corning’s North Carolina plant earlier this year provided an early anchor. Wednesday’s announcement with Nvidia suggests the appetite for optical technology is only accelerating, even as energy markets stabilize.

Yet the sudden market euphoria should not obscure how this crisis began. Trump’s return to the White House revived the “maximum pressure” approach that defined his first term, including the 2018 withdrawal from the 2015 nuclear deal that had successfully constrained Iran’s program. That decision, coupled with subsequent sanctions and military signaling, steadily raised tensions until they exploded into open conflict in February. Tehran’s closure of the strait was widely viewed as retaliation. The resulting energy spike hurt working families across Europe, Asia, and the United States far more than it damaged the intended target.

Iran has repeatedly said it will only accept a “fair and comprehensive” agreement. Whether the reported one-page memorandum meets that standard remains to be seen. Skeptics point out that Trump’s negotiating style often prioritizes optics over substance, and the continued U.S. port blockade suggests Washington is still trying to maintain leverage even as it claims victory.

For now, the immediate economic impact is clear. Lower oil prices will ease inflationary pressures and give central banks more room to maneuver. But the deeper lesson is how quickly a avoidable conflict in the Middle East can destabilize the global economy, and how quickly markets can pivot once the shooting appears ready to stop. Whether this progress leads to a durable diplomatic settlement or merely a temporary pause will determine if today’s relief rally proves lasting or fleeting.