Markets soar, oil prices plummet as hopes rise for U.S.-Iran peace
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Oil prices are sinking Wednesday and stock markets are bursting higher 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, sank 5.8 per cent to $103.54 US, down from more than $115 US early this week.
It dropped as U.S. President Donald Trump said on social media that the Strait of Hormuz could be “OPEN TO ALL” if Iran accepts a reported agreement that Trump 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 driven prices up for all kinds of products worldwide.
On Wall Street, the S&P 500 climbed 0.9 per cent and was heading for another record. The Dow Jones Industrial Average was up 498 points, or one per cent, as of 10:15 a.m. ET, and the Nasdaq composite was 1.1 per cent higher.
Stock markets abroad had even bigger gains. Indexes jumped 6.5 per cent in Seoul, 1.2 per cent in Hong Kong, 2.2 per cent in London and three per cent in Paris.
Hopes have risen several times already on Wall Street about a possible end to the war with Iran, only to quickly get dashed. 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 to around $97 US before returning above $100 US after Trump threatened to start bombing “at a much higher level and intensity” if Iran does not accept the agreement.
But Wall Street nevertheless latched onto 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 background, big U.S. companies continue to turn in much stronger profits for the start of 2026 than analysts expected. That’s helping to support the stock market despite all the uncertainties about the war.
With the Strait of Hormuz now doubly blockaded, oil prices fell while markets climbed on Monday, despite an initial shock. CBC senior business correspondent Peter Armstrong explains where the pain is being felt, and how public faith in a solution could be buoying the markets.
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