oil and – U.S. stocks surged on Wednesday as oil prices and Treasury yields eased, reviving optimism that tensions in the Middle East could be resolved. The Dow rose 645.47 points to close at 50,009.35, while traders also looked ahead to Nvidia’s first-quarter earnings
When the morning opened on the floor of the New York Stock Exchange, the mood was still wary. But by the close, traders were leaning into a different script: oil prices slid, U.S. Treasury yields cooled. and the market swung upward as optimism grew that conflict in the Middle East could soon be resolved.
The Dow Jones Industrial Average advanced 645.47 points, or 1.31%, closing at 50,009.35. The S&P 500 rose 1.08% to 7,432.97, while the Nasdaq Composite added 1.54% and ended at 26,270.36.
Energy fears eased quickly. West Texas Intermediate futures shed 5.66% to close at $98.26 per barrel. Brent crude pulled back 5.63% to settle at $105.02 a barrel. The pullback came after President Donald Trump told reporters the administration was in the “final stages” of negotiations with Iran. according to a pool report.
That shift in the risk mood rippled into the bond market. Treasury yields cooled following those developments, with the 10-year Treasury yield dropping more than 9 basis points on Wednesday and the 30-year Treasury yield shedding more than 6 basis points. One basis point equals 0.01%.
Investors have been on edge in recent days because bond prices had started to worry them. The 30-year yield had hit its highest level since 2007, while the 10-year yield neared multi-year highs. There is growing concern that inflation is reigniting as higher oil prices feed into costs. and that the Federal Reserve—soon to be led by Kevin Warsh—is behind the curve in fighting it. With the economy already under threat from higher energy costs. investors have also been bracing for the possibility that higher rates could derail growth.
Minutes from the latest Fed meeting showed that most officials expected rate hikes farther down the line if the Middle East conflict continued to exacerbate inflation. The minutes said: “A majority of participants highlighted. however. that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent.”.
In that setting, Wednesday’s stock rebound had another catalyst waiting just beyond the close. Traders turned their attention to Nvidia, which reports its first-quarter earnings after the close. The outcome is expected to offer a key view into the artificial intelligence trade and an update on demand for chips. Shares of the company were up more than 1%.
James Demmert. chief investment officer at Main Street Research. framed the stakes this way: “Nvidia is the most important AI stock. and since so much of the stock market’s gains over the past few years have been driven by the incredible capabilities of AI. the outcome of Wednesday’s earnings report means everything for this market.”.
Demmert also pointed to the market’s mood entering the report. The stock has risen nearly 20% this year. and while skepticism is built into the chipmaker and AI darling—especially after its massive run of more than 1. 400% in the last five years—expectations were “somewhat muted” going into Wednesday’s results.
Still, he highlighted the pressure points that could decide whether the rally holds: “The sticking points in Nvidia’s earnings report are any signs of margin compression due to rising memory prices, along with how the company is navigating sales in China,” he added.
By the time trading ended, stocks had climbed sharply enough to signal relief. But the day’s gains were tethered to two fast-moving variables—energy and rates—while the next major test for market sentiment sat squarely in Nvidia’s earnings release.
Dow Jones S&P 500 Nasdaq oil prices West Texas Intermediate Brent crude Treasury yields 10-year yield 30-year yield Federal Reserve Kevin Warsh Middle East Iran negotiations Nvidia earnings