Wall Street gains accelerated Wednesday after reports surfaced that Iranian operatives quietly reached out to U.S. intelligence officials, fueling hopes of potential diplomatic talks to ease escalating Middle East tensions. Investor sentiment also strengthened after President Donald Trump signaled efforts to stabilize global oil markets, easing fears of prolonged energy price shocks.
A report by The New York Times indicated that Iranian intelligence operatives indirectly contacted the CIA a day after recent attacks. While U.S. officials remain skeptical about the prospects for immediate de-escalation, markets responded positively to any signal that dialogue might be possible.
Still, caution lingers across trading desks.
“Until people think what’s happening in the Middle East will cause a recession, they’re giving stocks the benefit of the doubt,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. He added that despite uncertainty, U.S. investors have remained relatively resilient since the conflict began.
By late morning trading, major U.S. stock indexes were firmly higher. The Dow Jones Industrial Average rose 324.35 points, or 0.67%, to 48,824.77. The S&P 500 gained 59.90 points, or 0.88%, to 6,876.53, while the Nasdaq Composite jumped 327.79 points, or 1.45%, to 22,843.24.
Market volatility eased, with the CBOE Volatility Index — often called Wall Street’s fear gauge — dropping 2.86 points to 20.7. The small-cap focused Russell 2000 climbed 1%.
Advancing stocks outpaced decliners on both the NYSE and Nasdaq, reflecting broad-based buying activity.
Technology stocks rebounded after heavy February selling. Shares of Nvidia rose 1.6%, while Amazon advanced 3.4%. Data infrastructure firm Applied Digital surged 9.1%.
Crypto-related equities also rallied sharply, tracking a 7.6% jump in Bitcoin prices. MicroStrategy gained roughly 12%, and Coinbase added about 15%, underscoring renewed risk appetite in digital asset markets.
In the biotech sector, Moderna climbed 8.5% after agreeing to pay up to $2.25 billion to settle a prolonged legal dispute over a COVID-19 vaccine patent.
Oil prices remained elevated but steadied. The U.S. benchmark crude hovered near $74 per barrel, while Brent crude traded around $81. President Trump’s announcement of a U.S. naval escort for oil tankers passing through the Strait of Hormuz, along with political risk insurance measures, helped calm immediate supply concerns.
Despite that reassurance, energy producers declined. ConocoPhillips fell 2.8%, and Cheniere Energy slipped 0.8%. The S&P 500 energy sector led losses, dropping 1.4%.
Travel stocks, previously pressured by rising oil prices, showed mixed performance. American Airlines and Norwegian Cruise Line Holdings gained roughly 2% each, while Royal Caribbean Group dipped 1.8%.
Monetary policy expectations remain fluid. Investors have shifted forecasts for a 25-basis-point interest rate cut to September from July as geopolitical risks complicate the inflation outlook.
New York Fed President John Williams noted Tuesday that the U.S. economy has demonstrated resilience to energy price shocks. Policymakers, however, have offered mixed signals on how the conflict may influence the Federal Reserve’s rate path.
Meanwhile, a private payrolls report showed stronger-than-expected job growth in February, and a separate survey pointed to solid services sector activity — data points reinforcing the narrative of economic durability.
Later in the day, markets will review the Federal Reserve’s Beige Book, a district-by-district assessment of economic conditions.
Precious metals gained as traditional safe-haven assets attracted selective buying. Miner Endeavour Silver rose 4.6%.
The S&P 500 recorded nine new 52-week highs and three new lows, while the Nasdaq Composite posted 56 new highs against 63 new lows — a mixed but improving breadth signal.
Although geopolitical uncertainty persists, investors appear willing to bet that diplomatic overtures and oil market stabilization efforts could prevent broader economic fallout.
Read More: Oil Prices Surge After Iran Strikes, Gas Prices Rise
