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

The Dow Jones Industrial Average was up 296 points, or 0.6%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.1% higher.

Oil prices also fell back toward $100 per barrel after President Donald Trump said shortly before Wall Street began trading 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!!!”

There was no immediate response from Iran, but Trump had also said the night before that the U.S. military could end its offensive in two to three weeks.

That added to optimism following a couple tenuous wisps 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 financial markets have seen similar bouts of optimism get quickly undercut several times already, triggering manic swings back and forth. Because of a pattern where Trump has made statements that lifted markets, only to see the gains quickly disappear after increasing his military threats against Iran, investors say Trump’s statements are becoming less impactful.

And oil prices remain high, even if they’ve come in so far this week. The price for a barrel of Brent crude oil, the international standard, was sitting at $101.96 following its declines, which is still up from roughly $70 before the war began.

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

Iran hit an oil tanker off the coast of Qatar and Kuwait’s airport on Wednesday while airstrikes battered Tehran as fighting continued despite any potential signals for hope. 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.

In stock markets abroad, indexes leaped more than 1.5% in France, Germany and the United Kingdom. Asian markets had even bigger gain.

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

In the bond market, Treasury yields held relatively steady after a report said U.S. retailers made more money in February than economists expected. The 10-year Treasury yield rose to 4.31% from 4.30% late Tuesday.

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