U.S. Stocks Rebound on Iran Negotiation Hopes, Easing Oil Prices

U.S. stocks rallied broadly as international oil prices showed signs of stabilizing after surging following U.S. and Israeli attacks on Iran. Reports suggesting Iran may be open to negotiations and improved employment data also boosted investor sentiment.

On Wednesday, the Dow Jones Industrial Average rose 238.14 points (0.49%) to close at 48,739.41 on the New York Stock Exchange. The S&P 500 gained 52.87 points (0.78%) to 6,869.50, while the Nasdaq Composite jumped 290.79 points (1.29%) to 22,807.48.

Among mega-cap stocks, Nvidia rose 1.66%, joined by Microsoft (0.31%), Amazon (3.90%), Meta (1.93%), Broadcom (1.24%), and Tesla (3.51%). Apple fell 0.43%, Alphabet dropped 0.12%, and Walmart declined 0.10%.

Markets opened higher on positive employment and services sector data. ADP reported U.S. private payrolls increased by 63,000 in February, exceeding the Dow Jones consensus estimate of 48,000. This marked the largest gain since July last year.

The Institute for Supply Management reported the services sector PMI reached 56.1 in February, up 2.3 points from January's 53.8. This was the highest reading since July 2022, with the services sector maintaining expansion for 20 consecutive months. A PMI above 50 indicates expansion; below 50 signals contraction.

Concerns over a prolonged conflict eased after reports that Iranian intelligence officials indirectly contacted the CIA through a third country one day after the attacks began. While formal negotiations have not materialized, markets interpreted this as a signal that Iran may be open to ending hostilities.

The New York Times reported Wednesday, citing anonymous Middle Eastern and Western officials, that Iranian intelligence operatives indirectly contacted the CIA to discuss terms for ending the conflict just one day after attacks commenced. The NYT noted U.S. officials remain skeptical in the short term that either the Trump administration or Iran is ready to find an exit. "It remains unclear whether Iran is genuinely open to a deal," the report stated.

Stabilizing oil prices also supported markets after President Trump's efforts to calm energy concerns. On the fifth day since U.S. and Israeli strikes on Iran began, Brent crude May futures closed nearly flat at $81.40 per barrel on ICE Futures. WTI April futures edged up 0.1% to $74.66 per barrel on NYMEX. Trump announced the previous day that the U.S. International Development Finance Corporation would provide insurance for ships transiting the Gulf region and that the U.S. Navy would escort tankers through the Strait of Hormuz if necessary.