Stocks Jump as Iran Deal Hopes Lift Futures, Oil Plunges
Oil fell to $95.93 a barrel and Dow futures added 505 points as U.S.-Iran deal hopes revived Wall Street’s appetite for risk.
Wall Street futures surged as traders bet that easing Middle East tensions could pull oil lower and give consumers some relief at the pump. Dow futures rose 505 points, or 1%, while S&P 500 futures gained 0.9% and Nasdaq 100 futures climbed 1.5% on signs that the United States and Iran were moving closer to an agreement.
The latest jump followed reports that the White House believed it was close to a one-page memorandum of understanding with Iran that would end the war and create a framework for broader nuclear negotiations. One possible element under discussion was a moratorium on nuclear enrichment. An Iranian foreign ministry spokesperson said Iran was evaluating a U.S. proposal toward a resolution. Oil traders reacted fast: crude fell to $95.93 a barrel, down 6.20% on the day, even though prices remained well above year-ago levels.
The move has obvious household implications if the diplomatic thaw lasts. Brent crude had already ripped from about $72 a barrel on February 27 to nearly $120 at its peak after the Iran war began, and it logged a 51% gain in March, one of the largest monthly jumps on record. U.S. average gasoline prices climbed more than $1 a gallon in six weeks and pushed above $4.10, the highest since 2022. A sustained drop in oil would feed through to gas prices, help cool inflation expectations and could lift consumer sentiment, especially after weeks of energy-driven anxiety.
Markets were also coming off a strong prior session. The S&P 500 and Nasdaq closed at record highs on May 5, while the Dow finished up 350 points. Investors had already been leaning back into stocks as a ceasefire held and earnings strength, especially in technology, took center stage.
Advanced Micro Devices added fuel to that rally. The chipmaker reported first-quarter 2026 revenue of $10.3 billion, gross margin of 53%, operating income of $1.5 billion, net income of $1.4 billion and diluted earnings per share of $0.84. On a non-GAAP basis, gross margin was 55% and operating income reached $2.5 billion. AMD also forecast second-quarter revenue above Wall Street expectations, and its shares jumped 12% in extended trading after the release, bringing its gain to about 65% this year.
Still, the optimism carries risk. Exxon Mobil chief executive Darren Woods warned that the market had not fully absorbed the supply shock created by the Iran war and the closure of the Strait of Hormuz. If talks falter, the same market that is celebrating cheaper crude could quickly be forced to price in another spike.
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