Global stock markets soared and oil prices tumbled on Wednesday following a report that the White House believes it is close to reaching a memorandum to end the war with Iran, while momentum in artificial intelligence-driven trades accelerated, lifting equities to new records.
The report by Axios said the U.S. expects Iranian responses on several key points within the next 48 hours. A Pakistani source involved in the peace efforts confirmed the report to Reuters on Wednesday, fueling optimism that the conflict—which has disrupted global energy supplies—may soon be resolved.
Brent crude, the global benchmark, dropped 7.5% to $101.70 per barrel. The Iran war has all but closed the Strait of Hormuz, through which 20% of global energy normally flows, so a peace deal could alleviate some of the strain on oil and gas markets. Lower energy costs would also help central banks in their fight against inflation, reducing the need for further interest rate hikes.
Europe’s STOXX 600 index extended gains, rising 2.1% after climbing 0.7% a day earlier. MSCI’s All-Country World Index climbed 0.9% to a fresh record. Futures for the U.S. S&P 500 rose 0.7%, a day after the index rallied 0.8% to hit its latest record high, driven by strong corporate earnings and excitement about artificial intelligence.
“It seems equity investors are still looking to put money to work and are jumping on positive-sounding news from the Gulf,” said Chris Turner, head of global markets at ING, responding to an earlier rise in shares after U.S. President Donald Trump touted progress in peace talks.
The U.S. dollar, which has been a safe haven during the Iran war, dropped 0.5% against its major peers, reflecting investor hopes about a possible deal. Meanwhile, yields on government bonds fell along with oil prices as traders dialled down bets on central bank rate hikes. The 10-year U.S. Treasury yield fell 7 basis points to 4.35%.
In Asia, the broadest index of Asia-Pacific shares outside Japan jumped 3.2%, led by a 6.5% surge for South Korea’s KOSPI, which reopened after a holiday. Samsung Electronics jumped 14%, pushing its market value above $1 trillion and overtaking Berkshire Hathaway. “Due to the capex spend we are seeing from AI hyperscalers in the U.S., the earnings growth trajectory for sectors such as semiconductors, tech hardware, industrials and materials in Asia exceeds anything I have seen in a long time,” said Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis Investment Managers.
The market rally reflects a dual narrative: the potential end of a costly war that has roiled energy markets, and the enduring optimism around AI, which continues to drive investor appetite for risk assets. While a peace deal remains unconfirmed, the mere prospect has already reshaped global financial landscapes.
Source: ARY News