U.S. stocks rallied Wednesday at the closing bell as investors welcomed easing concerns over Middle East tensions and continued momentum in artificial intelligence-driven technology shares. The Dow Jones Industrial Average rose 612.34 points, or 1.24%, to 49,910.6. The S&P 500 gained 105.90 points, or 1.46%, to 7,365.12, for a record close, while the Nasdaq Composite climbed 512.82 points, or 2.02%, to 25,838.9, also a record.
The primary catalyst for the advance was growing optimism that Washington and Tehran may be nearing a diplomatic framework to reduce tensions surrounding the Strait of Hormuz, a key artery for global oil shipments. Investors were encouraged by rising hopes for an Iran peace agreement alongside another round of strong technology earnings.
Oil prices plunged as traders priced in the possibility of improving crude flows through the Middle East. June crude oil futures settled at $94.87, down $7.40, or 7.24%, after briefly trading near session lows earlier in the day. The sharp decline in energy prices helped calm inflation concerns and supported broader equity buying.
The CBOE Volatility Index, or VIX, edged down 0.21 points to 17.17, signaling easing investor anxiety despite ongoing geopolitical uncertainty. The volatility gauge remained well below levels seen during the recent escalation in Middle East tensions.
Technology shares again led gains after strong earnings and optimistic AI-related forecasts boosted sentiment across semiconductors and megacap growth stocks.
AMD shares surged following stronger-than-expected guidance tied to data center demand, helping lift the broader chip sector. The company not only beat Wall Street expectations across nearly every major metric, but management also delivered an aggressively bullish tone around AI demand, server CPU growth, and long-term data center opportunity.
Attention now turns to the upcoming April jobs report which will be released Friday morning.