Stocks rushed higher worldwide overnight and oil prices eased as hopes built that the war with Iran could end soon. That's despite some of the signals that investors took as hopeful signs being subject to dispute, and several earlier bouts of optimism in financial markets being undercut by escalations in the conflict.
The S&P 500 rose 0.7% and added to its leap from the day before, which was its best since last spring. That followed even bigger gains for stock markets across Europe and Asia, including an 8.4% surge in South Korea, which were catching up to Wall Street's rally from Tuesday.
The Dow Jones Industrial Average climbed 224 points, or 0.5%, and the Nasdaq composite rallied 1.2%.
Oil prices also fell back toward $US100 a barrel after President Donald Trump said late on Tuesday that the US military could end its offensive in two to three weeks.
That added to optimism following a couple tenuous signals of hope from earlier on Tuesday that Wall Street latched on to, 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 were met, including "guarantees to prevent a recurrence of aggression".
Hope trumps investor doubts, for now
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 hope has been quick to reverse to doubt on Wall Street, triggering manic swings back and forth for financial markets since the war with Iran began. Trump has also made statements that lifted markets, only to see the gains quickly disappear after increasing his military threats.
Shortly before Wall Street began trading on Wednesday, Trump claimed in a post on his social media network 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!!!"
But Iran's Foreign Ministry spokesman, Esmail Baghaei, quickly called that claim "false and baseless," according to a report on Iranian state television.
Oil prices remain high
Oil prices also remain high, even if they've eased recently. The price for a barrel of Brent crude oil, the international standard, was sitting around $US101 following its declines, which is still up from roughly $US70 before the war began.
US petrol prices rose again overnight to a national average of $US4.06 per gallon, according to the motorists’ club the AAA.
Iran hits tanker
Iran, meanwhile, hit an oil tanker off the coast of Qatar and Kuwait's airport on Wednesday while airstrikes battered Tehran as the fighting continued. Iran also continues to hold a grip on the Strait of Hormuz, where a fifth of the world's traded oil passes during peacetime.
The White House said Trump will deliver a public address Wednesday evening US time on the Iran war.
On Wall Street, three out of every five stocks within the S&P 500 rose as Big Tech powered the move higher. Gains of 3.4% for Alphabet and 0.8% for Nvidia were two of the strongest forces lifting the S&P 500.
Such gains have pulled the S&P 500, which sits at the heart of many 401(k) accounts, back to within 5.8% of its all-time high set early this year. Just on Monday, the index briefly neared a 10% drop from its record, a steep-enough fall that professional investors have a name for it: a "correction."
All told, the S&P 500 rose 46.80 points to 6,575.32. The Dow Jones Industrial Average added 224.23 to 46,565.74, and the Nasdaq composite climbed 250.32 to 21,840.95.
In stock markets abroad, indexes leaped more than 2% in France and Germany. Asian markets had even bigger gains.
Tokyo's Nikkei 225 jumped 5.2% after a survey showed business sentiment for major Japanese manufacturers improved despite worries about the Iran war.
The Associated Press
