WASHINGTON (dpa-AFX) - Stocks have moved sharply higher over the course of the trading day on Wednesday, adding to the gains posted in the previous session. With the continued advance, the Nasdaq and the S&P 500 have reached new record intraday highs.
Currently, the major averages are just off their highs of the session. The Nasdaq is up 338.17 points or 1.3 percent at 25,664.29, the S&P 500 is up 81.08 points or 1.1 percent at 7,340.30 and the Dow is up 612.54 points or 1.2 percent at 49,910.79.
The rally on Wall Street comes amid optimism about an end to the conflict in the Middle East following an upbeat report from Axios.
Citing two U.S. officials and two other sources briefed on the issue, Axios said the White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war.
Axios said the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz.
While noting that nothing has been agreed yet, the sources told Axios this was the closest the parties had been to an agreement since the war began.
Adding to the optimism about a peace deal, President Donald Trump said the U.S. would pause its efforts to escort ships through the Strait of Hormuz to see whether or not the agreement can be finalized and signed.
However, somewhat dampening the hopes for peace, Trump warned in a separate Truth Social post that the U.S. would resume bombing Iran 'at a much higher level and intensity than it was before' if they don't reach an agreement.
'Even without a fully detailed agreement, the mere progress toward a framework for de-escalation is enough to alter how risk is being priced,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
'However, it is important to stress that this is still a fragile step rather than a definitive resolution,' she added. 'A one-page memo suggests that many key details remain unresolved, and past experience has shown that negotiations can quickly stall or reverse.'
The strength on Wall Street also comes amid a sharp increase by shares of Advanced Micro Devices (AMD), with the chipmaker soaring by 17 percent.
AMD is surging after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines and providing upbeat second quarter guidance.
On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. jumped by more than expected in the month of April.
ADP said private sector employment shot up by 109,000 jobs in April after climbing by a downwardly revised 61,000 jobs in March.
Economists had expected private sector employment to grow by 85,000 jobs compared to the addition of 62,000 jobs originally reported for the previous month.
Sector News
Gold stocks have skyrocketed amid a sharp increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index soaring by 7.6 percent.
Substantial strength is also visible among computer hardware stocks, as reflected by the 6 percent spike by the NYSE Arca Computer Hardware Index.
Airline stocks have also shown a significant move to the upside, driving the NYSE Arca Airline Index up by 5.8 percent.
Steel, semiconductor and housing stocks are also turning in strong performances on the day, while energy stocks have moved sharply lower along with the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. With the Japanese markets still closed, China's Shanghai Composite Index and Hong Kong's Hang Seng Index both shot up by 1.2 percent.
The major European markets have also shown strong moves to the upside on the day. While the French CAC 40 Index is up by 3 percent, the German DAX Index is up by 2.2 percent and the U.K.'s FTSE 100 Index is up by 2.1 percent.
In the bond market, treasuries are extending the rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.0 basis points at 4.356 percent.
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