Stocks steady near records as oil eases on U.S.-Iran talks hopes

Stocks held near record levels Wednesday as traders weighed a fragile diplomatic opening between Washington and Tehran against the risk that the Middle East conflict could flare again. U.S. stock futures were little changed before the opening bell after Tuesday’s rally pushed the S&P 500 to 6,967.38, leaving the benchmark less than 1% below its all-time high of 7,002.28 set on January 28. The index gained 1.18% on Tuesday, its ninth positive session in 10 trading days, while the Nasdaq Composite rose for a 10th straight session and the Dow Jones Industrial Average added 317.74 points, or 0.66%.

The market’s mood turned on the possibility of a second round of U.S.-Iran negotiations after weekend peace talks broke down. Donald Trump said Monday, “We’ve been called by the other side” and that “They’d like to make a deal very badly,” while a White House official said Tuesday that a new round of talks was under discussion, though no date had been set. The earlier meeting in Islamabad was the first direct U.S.-Iran encounter in more than a decade and the highest-level dialogue since the 1979 Islamic Revolution, underscoring how unusual even limited contact remains.

Oil prices were the other major driver. West Texas Intermediate crude fell 7.87% to $91.28 a barrel on Tuesday, and Brent crude dropped 4.6% to $94.79, easing some of the pressure that had rippled through equities when fears mounted over a blockade of the Strait of Hormuz. That waterway is a chokepoint for about 20% of global energy supplies, so every sign of reduced tension can quickly cool crude prices and steady risk appetite. Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, said the conflict is not over and that “there are plenty of concerns still out there,” even as investors rotate back into favored stocks. Baird strategist Ross Mayfield said the market appears to be pricing in some of that anxiety already, with stocks back near highs and earnings season offering a better backdrop.

The rally also reflects what the market is not saying. Near-record stocks do not mean households feel secure, borrowing costs are low, or geopolitics are settled. A 1% move in the S&P 500 can lift 401(k) balances on paper, but it does not guarantee cheaper mortgages, lower credit-card rates, or relief at the gas pump. Before Wednesday’s open, Bank of America, Morgan Stanley, PNC Financial and ASML were set to report earnings, while traders also watched March import and export price data for signs that inflation pressures were easing or returning. In Asia, stocks followed Wall Street higher, with South Korea’s Kospi and Japan’s Nikkei 225 both advancing as hopes for a diplomatic thaw supported risk assets.