Iran Peace Hopes Lift Stocks, Oil Prices Drop

The S&P 500 index closed up 0.4%, the Nasdaq Composite gained 0.7%, and the Dow jumped 305 points, while the Russell 2000 rose 1.1%. U.S. crude oil dropped 1.4% to $90 per barrel, though it remains up 30% since the war began on February 28 and 50% year-to-date.

International Brent crude traded near breakeven at $102 per barrel, and heating oil fell 6%. UBS Global Wealth Management chief economist Paul Donovan stated markets prioritize positive news over Iranian dismissals.

Geopolitical risk persists, with the Strait of Hormuz seeing minimal traffic, impacting 20% of global oil supply. Analysts at Bespoke Investment Group expect continued volatility and inflation concerns, which will keep central banks from cutting rates.

The European Central Bank and Bank of England are expected to raise rates. The Nasdaq is down nearly 6% for the year, and the S&P 500 is on track for a 3.5% loss.