Dow soars nearly 900 points as Wall Street bets on Iran peace deal

The Dow Jones Industrial Average soared deeper into record terrain on Thursday as investors pinned their hopes on a peace deal in Iran. 

The blue-chip index surged 877 points in afternoon trading, or 1.7%, to 51,564. The broader S&P 500 and Nasdaq Composite Index saw more modest gains, rising 0.5% and 0.2%, respectively. 

Stocks have notched a succession of record highs in recent weeks, with Wall Street investors betting that the U.S. and Iran are nearing an agreement to end the war. 

Those expectations have kept a lid on global oil prices despite spasms of violence, including an attack this week by Iran on Kuwait’s airport and U.S. strikes on an Iranian island near the Strait of Hormuz.

“Middle East-linked news flow was net positive as the U.S. and Iran continue negotiating, while Israel and Lebanon agree to a ceasefire,” equity analyst Adam Crisafulli of VitalKnowledge told clients in a research note.

Despite those signs of progress, Crisafulli also said that “time is very much of the essence” as global oil inventories fall to what he called “dangerously low levels.”

Prices of Brent crude, the international benchmark, fell to $94.43 a barrel after jumping earlier this week amid renewed violence in the Middle East. The U.S. benchmark dipped to $92.18.

Most investors expect the U.S. and Iran to reach a deal this month that would reopen the Strait of Hormuz to oil tankers, according to Wall Street analysts. 

A deal to end the conflict is by no means assured. Iranian Foreign Minister Abbas Araghchi said Wednesday that “no tangible progress” has been made in negotiations to end the war. 

Not all sectors participated in the rally. Investors pared holdings of artificial intelligence stocks amid concerns that the sector’s extended rally is bound to slow down.