Stocks rally worldwide as oil prices ease on hopes for a possible end to the Iran war

NEW YORK (AP) — Stocks are rushing higher worldwide, and oil prices are easing Wednesday as hopes build that the war with Iran could end soon. That's even though some of the signals investors saw as hopeful are already under dispute, and several earlier bouts of optimism in financial markets quickly got undercut by continued, fierce fighting in the war.

The S&P 500 rose 0.7% and added to its leap from the day before, which was its best since last spring. That followed even bigger gains for stock markets across Europe and Asia, including an 8.4% surge in South Korea, which were catching up to Wall Street’s rally from Tuesday.

The Dow Jones Industrial Average was up 232 points, or 0.5%, with an hour remaining in trading, and the Nasdaq composite was 1% higher.

Oil prices also fell back toward $100 per barrel after President Donald Trump said late Tuesday that the U.S. military could end its offensive in two to three weeks.

That added to optimism following a couple tenuous signals of hope from earlier Tuesday that Wall Street latched onto, including a news report quoting Iran’s president as saying that it has “the necessary will to end the war” as long as certain requirements are met, including “guarantees to prevent a recurrence of aggression.”

The worry on Wall Street has been that the war may last a long time and keep oil and natural gas from the Persian Gulf out of global markets, which could create a brutal blast of inflation.

But hope has been quick to reverse to doubt on Wall Street, triggering manic swings back and forth for financial markets since the war with Iran began. Trump has also made statements that lifted markets, only to see the gains quickly disappear after increasing his military threats.

Shortly before Wall Street began trading on Wednesday, Trump claimed in a post on his social media network that Iran “has just asked the United States of America for a CEASEFIRE!”

“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”

But Iran’s Foreign Ministry spokesman, Esmail Baghaei, quickly called that claim “false and baseless,” according to a report on Iranian state television.

Oil prices also remain high, even if they’ve eased recently. The price for a barrel of Brent crude oil, the international standard, was sitting just above $101 following its declines, which is still up from roughly $70 before the war began.

U.S. gasoline prices rose again overnight to a national average of $4.06 per gallon, according to the auto club AAA.

Iran, meanwhile, hit an oil tanker off the coast of Qatar and Kuwait’s airport on Wednesday while airstrikes battered Tehran as the fighting continued. Iran also continues to hold a grip on the Strait of Hormuz, where a fifth of the world’s traded oil passes during peacetime.

“De-escalation hopes have given markets a lift, but we think the effects of the war would, in many cases, persist even if the war did end soon,” Thomas Mathews, head of markets, Asia Pacific at Capital Economics, said in a research note Wednesday.

“It’s worth thinking through how markets might fare if the war were to end ‘very soon,’” he wrote. “Do markets have further to recover if sentiment continues to improve? The answer is almost certainly yes.”

The White House said Trump will deliver a public address Wednesday evening on the Iran war.

On Wall Street, three out of every five stocks within the S&P 500 rose as Big Tech powered the move higher. Gains of 3% for Alphabet and 0.7% for Nvidia were two of the strongest forces lifting the S&P 500.

Eli Lilly rallied 3.9% after U.S. regulators approved its GLP-1 pill for weight loss.

Such gains have pulled the S&P 500, which sits at the heart of many 401(k) accounts, back to within 5.8% of its all-time high set early this year. Just on Monday, the index briefly neared a 10% drop from its record, a steep-enough fall that professional investors have a name for it: a “correction.”

Nike sank 15% even though it reported a stronger profit for the latest quarter than expected. Analysts said it gave some lackluster financial forecasts.

Oil companies also fell with the price of crude, and Exxon Mobil slumped 4.9%.

In stock markets abroad, indexes leaped more than 2% in France and Germany. Asian markets had even bigger gains.

Tokyo’s Nikkei 225 jumped 5.2% after a survey showed business sentiment for major Japanese manufacturers improved despite worries about the Iran war.

In the bond market, Treasury yields held relatively steady after a report said U.S. retailers made more money in February than economists expected. A separate report said U.S. manufacturing growth last month was slightly faster than economists expected.

The 10-year Treasury yield rose to 4.32% from 4.30% late Tuesday.

AP Business Writers Chan Ho-him and Matt Ott contributed.