Oil prices experienced a decline on Wednesday as global stock markets surged amid optimism regarding a potential agreement between the United States and Iran that could allow crude oil shipments from the Persian Gulf to resume. The price of Brent crude oil, the international benchmark, dropped by 7.8% to slightly above $100 per barrel, down from over $115 earlier in the week.
The decrease in oil prices followed U.S. President Donald Trump’s announcement on social media hinting at a possible reopening of the Strait of Hormuz, a critical waterway that has been affected by the conflict with Iran, leading to disruptions in oil tanker traffic. A resolution could alleviate inflationary pressures and facilitate the smooth flow of oil, impacting global product prices.
The positive sentiment extended to Wall Street, where the S&P 500 recorded a 1.5% gain, reaching a new high, while the Dow Jones Industrial Average surged by 612 points, and the Nasdaq composite hit a record high with a 2% increase. Similarly, Canada’s S&P/TSX composite index closed up by approximately 1.2%.
Global markets also saw significant gains, with Seoul’s index rising by 6.5%, Paris by 2.9%, and London by 2.1%. Despite fluctuations in oil prices during the day, optimism remained buoyant, supported by Trump’s decision to halt aggressive actions related to the Strait of Hormuz and calls for a ceasefire from China’s foreign minister after discussions with Iran.
Amid uncertainties surrounding the conflict, U.S. corporations reported stronger-than-expected profits for the beginning of 2026, contributing to market stability. Notably, chip companies like AMD and Super Micro Computer, driven by advancements in artificial intelligence technology, posted impressive earnings, while airlines and cruise operators benefitted from the prospect of easing oil prices. Additionally, Treasury yields declined as oil price reductions alleviated inflation concerns, with the 10-year U.S. Treasury yield falling to 4.35% from 4.43% the previous day.