Wall Street rises toward records as US stocks catch up to the world's gains from the day before

The gains came even though fighting continued in the region, and the U.S. military said it carried out “self-defense” strikes in southern Iran, including on missile launch sites and boats placing mines. Markets have rallied in the past on hopes for a coming end to the war with Iran, only to see the conflict drag on.

The price for a barrel of Brent crude, the international standard, rose 3.8% to $99.80, but that reclaimed only some of its 7.1% plunge from Monday. The price for a barrel of U.S crude oil, meanwhile, fell 3% to $93.74.

Oil prices have been at the center of the action for financial markets since the United States and Israel attacked Iran in late February. The ensuing war has closed the Strait of Hormuz to most oil tankers, keeping crude pent up in the Persian Gulf instead of flowing to customers worldwide. That in turn has driven up oil’s price and sent a wave of painful inflation around the world.

Hopes for a deal to improve the flow of oil helped lift stocks of companies with big fuel bills. United Airlines rose 6.6%, and cruise operator Carnival steamed 3.5% higher.

The lower oil prices also helped pull yields down in the U.S. bond market, which eased the pressure on Wall Street. The yield on the 10-year Treasury fell to 4.49% from 4.56% late Friday.

It’s a respite following recent gains for yields in bond markets worldwide, which threatened to slow economies and undercut prices for stocks and all kinds of other investments. High yields have already forced the average long-term U.S. mortgage rate to its most expensive level since last summer, and they could curtail companies’ borrowing to build the artificial-intelligence data centers that have supported the U.S. economy’s growth recently.

Big technology stocks also continued their big runs. Micron Technology leaped 17.7% to top $880 and was the strongest force lifting the S&P 500 after analysts at UBS led by Timothy Arcuri raised their 12-month price target for the stock to $1,625 from $535. They're forecasting continued strength in demand for computer memory, and Micron's stock has already tripled so far this year.

That helped offset a drop of 11.6% for AutoZone, which reported slightly weaker revenue for the latest quarter than analysts expected, though its profit topped expectations. CEO Phil Daniele said performance for the retailer’s stores in Brazil and Mexico was below its plan.

Most big U.S. companies have been reporting both profit and revenue for the start of 2026 above what analysts expected. The strong performances have helped vault U.S. stocks to records, even with all the uncertainty around oil prices and the war with Iran.

U.S. households have been feeling discouraged about the economy because of accelerating inflation, and a report on Tuesday said consumer confidence edged downward in May, though the number was not as bad as economists expected. It followed a report on Friday that said sentiment among U.S. consumers hit its lowest level on record.

In stock markets abroad, indexes were mixed. South Korea’s Kospi jumped 2.5% as it also caught up with other markets following a Monday closure for a holiday.

London’s FTSE 100 added 0.5% even though British petroleum giant BP fell 5.1% there. BP ousted its chairman over what it called serious concerns related to “important governance standards, oversight and conduct.”

Japan’s Nikkei 225 fell 0.2% from its all-time high set the day before.

AP Business Writer Elaine Kurtenbach contributed to this report.