US stocks closed slightly higher Tuesday as expectations grew that a peace agreement between the United States and Iran is imminent.
The Dow Jones Industrial Average rose 182.60 points, or 0.36%, to close at 50,644.28 on May 27 in New York. The Standard & Poor's 500 Index gained 1.24 points, or 0.02%, to 7,520.36, while the Nasdaq Composite Index advanced 18.55 points, or 0.07%, to 26,674.73. Although the gains were modest, all three indexes finished at record highs. It was the first time the three major US indexes simultaneously hit record highs since October 28 last year — a span of seven months.
Among large-cap tech stocks, Apple gained 0.82%, Amazon 2.47%, Tesla 1.56%, Meta — the parent of Facebook — 3.74%, and Micron 3.63%. In contrast, Nvidia fell 1.05%, Microsoft 0.81%, Alphabet — Google's parent — 0.01%, and Broadcom 0.04%.
The market was buoyant from the opening bell on hopes for a US-Iran peace deal. Iran's state-run IRIB broadcaster reported that it had obtained a draft memorandum of understanding (MOU) on the US-Iran peace agreement, and that the document includes provisions for the United States to withdraw troops from areas near Iran and lift its naval blockade. The broadcaster added that the draft also stipulates Iran will restore the number of commercial vessels passing through the Strait of Hormuz to pre-war levels within one month. The White House denied the report as "fabricated," but market participants placed greater weight on the view that a deal is drawing closer.
President Donald Trump, apparently mindful of the controversy, said while chairing a Cabinet meeting at the White House that "Iran very much wants to make a deal" and that "so far they have not reached a level that satisfies us." Trump went on to say that "if a deal is not reached, we will just have to finish the job," reiterating that Iran's military capabilities have been completely wiped out. "They are barely coming to the negotiating table, exhausted," he said. "We may have to go back and finish it off, or we may not have to right away." The remarks were interpreted as suggesting he could resort to launching massive airstrikes on Iranian infrastructure such as power plants. In a phone interview with PBS the same day, when asked whether Iran would abandon highly enriched uranium in exchange for sanctions relief, Trump replied, "Sanctions relief is not at all on the table."
International oil prices plunged following the Iranian media's disclosure of the MOU draft. On the ICE Futures Exchange in London, Brent crude for July delivery fell 5.3% to $94.29 a barrel. On the New York Mercantile Exchange, US West Texas Intermediate (WTI) crude for July delivery closed down 5.6% at $88.68 a barrel. It was the first time WTI futures had fallen into the $80 range since April 20, a month earlier.
