Oil prices experienced a decline on Wednesday, while global stock markets surged amid optimism surrounding potential developments between the United States and Iran regarding the resumption of crude oil deliveries from the Persian Gulf. The price of Brent crude oil, a key international benchmark, dropped by 7.8% to slightly above $100 per barrel, down from over $115 earlier in the week.
The market shift came following remarks by U.S. President Donald Trump on social media regarding the Strait of Hormuz potentially reopening for all vessels if Iran agrees to an undisclosed reported deal. The strait has been a significant point of contention, blocking oil tankers and disrupting global oil flow amid the conflict with Iran.
On Wall Street, the S&P 500 saw a notable 1.5% increase, achieving its best performance in nearly a month and hitting a fresh all-time high. The Dow Jones Industrial Average surged by 612 points (1.2%), and the Nasdaq composite reached a new record with a 2% rise.
In Canada, the S&P/TSX composite index closed up around 1.2% at 33,981.82. Overseas, stock markets also saw substantial gains, with Seoul climbing by 6.5%, Paris by 2.9%, and London by 2.1%.
Although there have been previous instances of optimism regarding a resolution to the Iran conflict on Wall Street, which were later dashed, the recent developments fueled market optimism. Despite a temporary drop to approximately $97 per barrel, the price of Brent oil rebounded above $100 after Trump issued warnings of increased military action if Iran does not comply with the potential agreement.
Moreover, positive signals emerged as Trump indicated a pause in efforts to forcefully reopen the Strait of Hormuz, while China’s foreign minister called for a comprehensive ceasefire following discussions with Iran’s foreign minister, underscoring China’s economic and political ties to Iran.
Amid ongoing uncertainties surrounding the conflict, major U.S. corporations continue to report stronger-than-expected profits for the beginning of 2026, supporting the stock market. Chip company AMD notably surged by 18.6%, citing growth in artificial intelligence technology, which demands substantial computing power. Other companies in the AI sector, such as Super Micro Computer and Nvidia, also posted robust earnings, further bolstering market sentiment.
Additionally, companies heavily reliant on fuel costs witnessed gains on the prospect of easing oil prices. United Airlines, Carnival, and Royal Caribbean saw increases of 6.8%, 6.8%, and 8.8%, respectively. In the bond market, Treasury yields declined as oil price reductions alleviated inflation concerns, with the 10-year U.S. Treasury yield dropping to 4.35% from 4.43% the previous day.