Wall Street hit fresh record highs again on news that the United States and Iran have effectively wrapped up negotiations on a ceasefire memorandum of understanding (MOU), with only President Donald Trump's approval remaining.
On Wednesday in New York, the Dow Jones Industrial Average closed at 50,668.97, up 24.69 points, or 0.05%, from the previous session. The Standard & Poor's 500 Index rose 43.31 points, or 0.58%, to 7,563.67, while the Nasdaq Composite Index jumped 242.74 points, or 0.91%, to 26,917.47.
Among the largest tech stocks by market capitalization, most posted gains. Nvidia rose 0.78%, Apple climbed 0.53%, Microsoft advanced 3.47%, Amazon gained 0.79%, Google parent Alphabet added 0.33%, Broadcom rose 1.12%, Tesla edged up 0.40%, and Facebook parent Meta inched up 0.01%. Micron, which had surged recently, fell 0.53% as investors took profits.
The market climbed on foreign media reports that Washington and Tehran had effectively agreed on a ceasefire MOU. U.S. internet outlet Axios reported Wednesday, citing two U.S. officials, that the two countries had agreed on most of the negotiating terms as of the 26th. According to a U.S. official, the Iranian side has received approval from its leadership and is ready to sign the MOU. However, President Donald Trump opted not to approve it immediately and decided to take several days to consider.
U.S. officials explained that the MOU, which extends the ceasefire by 60 days, will explicitly state that "shipping through the Strait of Hormuz will proceed unrestricted." They added that this means there will be no toll collection or attacks, and that Iran must remove all mines from the strait within 30 days. The U.S. military's maritime blockade on vessels entering and leaving Iranian ports and coasts will also be lifted following the signing of the MOU. This will proceed in proportion to the recovery of civilian shipping operations through the Strait of Hormuz.
The MOU is also expected to include Iran's pledge not to pursue nuclear weapons. The agreement will specify that Iran's handling of highly enriched uranium (HEU) will be among the first issues discussed during the 60-day ceasefire extension. In return, the U.S. is expected to commit to discussing sanctions relief and the release of Iran's frozen assets. The MOU will also include measures to help Iran begin receiving supplies and humanitarian aid. Responding to the Axios report, Iran's Tasnim News Agency claimed, "The Western side's assertion that the MOU text has been finalized and only awaits both sides' official announcement is not true, and the deal has not yet been finalized."
The U.S. and Iran had resumed combat ahead of the MOU signing. The U.S. shot down Iranian suicide drones that threatened commercial vessels and U.S. troops near Bandar Abbas, close to the Strait of Hormuz. It also detected movements to launch additional drones and conducted airstrikes on Iranian military ground control stations. In response, Iran's Islamic Revolutionary Guard Corps (IRGC) launched a counterattack with missiles on a U.S. Air Force base.
The U.S. April Personal Consumption Expenditures (PCE) and first-quarter Gross Domestic Product (GDP) figures were also released Wednesday. Last month's headline PCE price index rose 0.4% from March, while the core price index, which excludes volatile food and energy, climbed 0.2%. Compared with the same period last year, the headline index rose 3.8% and the core index rose 3.3%, marking the highest readings in three years since May 2023 and October 2023, respectively.
The first-quarter GDP revised estimate (annualized) came in at 1.6%, down 0.4 percentage point from the previous advance estimate of 2.0%. The downward revision in personal consumption growth from 1.6% to 1.4% was the decisive factor behind the slower pace.
International oil prices were mixed amid uncertainty over the Middle East conflict. On the ICE Futures Exchange in London, Brent crude for July delivery closed at $93.71 a barrel, down 0.6% from the previous session. On the New York Mercantile Exchange, U.S. West Texas Intermediate (WTI) crude futures for July delivery rose 0.3% to $88.90 a barrel.
