Financial Markets                      05/06 15:22

   

   NEW YORK (AP) -- Oil prices sank Wednesday, and stock markets rallied 
worldwide with hopes that the United States and Iran are nearing a deal to 
allow ships to deliver crude from the Persian Gulf once again to their 
customers.

   The price for a barrel of Brent crude oil, the international standard, fell 
7.8% to $101.27, down from more than $115 early this week. It dropped as 
President Donald Trump said the Strait of Hormuz could be "OPEN TO ALL" if Iran 
accepts a reported agreement that the U.S. president did not detail.

   The small strait has caused big trouble for the global economy because the 
war with Iran has blocked oil tankers from using it to exit the Persian Gulf. A 
reopening could allow oil to flow freely again and remove upward pressure on 
inflation that's driving prices up for all kinds of products worldwide.

   On Wall Street, the S&P 500 climbed 1.5% for its best day in nearly a month 
and hit another all-time high. The Dow Jones Industrial Average jumped 612 
points, or 1.2%, and the Nasdaq composite rose 2% to its own record.

   Stock markets abroad had even bigger gains, with indexes leaping 6.5% in 
Seoul, 2.9% in Paris and 2.1% in London.

   Of course, hopes have risen several times already on Wall Street about a 
possible end to the war with Iran, only to get dashed each time. That could 
happen again, and oil prices pared some of their steepest losses from Wednesday 
morning.

   The price for a barrel of Brent briefly dove below $97 before returning 
above $100 after Trump threatened to start bombing "at a much higher level and 
intensity" if Iran does not accept the agreement.

   Wall Street nevertheless latched onto some potentially encouraging signals. 
Trump said Tuesday he was pausing his effort to forcefully reopen the Strait of 
Hormuz to commercial ships. And China's foreign minister called for a 
comprehensive ceasefire following a meeting with Iran's foreign minister. That 
could be influential because of how closely tied Iran is to China economically 
and politically.

   In the meantime, big U.S. companies continue to turn in much stronger 
profits for the start of 2026 than analysts expected. That's supporting the 
stock market despite all the uncertainties created by the war.

   AMD helped lead the market with a surge of 18.6% after it joined the list of 
big-name companies topping expectations for both profit and revenue. CEO Lisa 
Su said the chip company benefited from continued growth from 
artificial-intelligence technology, which is demanding tremendous amounts of 
computing power from data centers.

   AMD also said its revenue growth could accelerate in the current quarter to 
roughly 46% from a year earlier.

   Another company enmeshed in the AI industry, Super Micro Computer, rallied 
24.5% after likewise delivering stronger earnings than analysts expected. 
Nvidia, the chip company that became the poster child of the AI boom, rose 5.7% 
and was the single strongest force lifting the S&P 500 because of its immense 
size.

   CVS Health climbed 7.6% after delivering better results for the first 
quarter than analysts expected and raising its financial forecasts for the full 
year. The Walt Disney Co. gained 7.5% after saying its "Zootopia 2" movie 
helped draw people to its streaming business, parks and cruise ships, while 
delivering a better-than-expected profit. Uber Technologies drove 8.5% higher 
after giving a bookings forecast for the spring that was higher than analysts 
expected.

   Outside of earnings reports, companies with big fuel bills jumped on hopes 
that oil prices will continue to ease. That included gains of 6.8% for United 
Airlines, 6.8% for Carnival and 8.8% for Royal Caribbean.

   All told, the S&P 500 rose 105.90 points to 7,365.12. The Dow Jones 
Industrial Average jumped 612.34 to 49,910.59, and the Nasdaq composite climbed 
512.82 to 25,838.94.

   In the bond market, Treasury yields sank as falling oil prices took pressure 
off inflation. The yield on the 10-year Treasury dropped to 4.35% from 4.43% 
late Tuesday. That's a notable move for the bond market.

   Lower yields can bring down rates for mortgages and other kinds of loans 
going to U.S. households and businesses, which in turn can give the economy a 
boost. Lower yields also tend to push upward on prices for stocks and other 
kinds of investments. The 10-year yield, though, remains well above its 3.97% 
level from just before the war.

   In stock markets abroad, South Korea's Kospi jumped above the 7,000 level 
for the first time to a record thanks to big gains for AI winners, including 
Samsung Electronics and SK Hynix.

   ___

   AP Business Writers Yuri Kageyama and Matt Ott contributed.

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