US stocks jump to their best day in 2 months on hopes for a deal to get crude flowing globally again

U.S. stock markets rallied sharply on Thursday, marking their best day in two months, after President Donald Trump signaled progress in high-level discussions with Iran. The S&P 500 rose 1.8% to 7,394.30, the Dow Jones Industrial Average jumped 929 points to 50,848.75, and the Nasdaq composite climbed 2.5% to 25,809.66. Trump announced on his social media network that talks with Iran had reached the highest leadership level and that a signing date would be revealed soon, easing concerns about disruptions to global oil supplies. The news triggered a 2.6% drop in U.S. crude prices to $87.71 and a 2.9% fall in Brent crude to $90.38, though both remain above pre-war levels. A potential deal could reopen the Strait of Hormuz, allowing oil tankers to transport crude from the Persian Gulf to global markets again. Rising oil prices had previously fueled inflation, contributing to a 4.4% increase in U.S. wholesale prices in May, prompting the European Central Bank to raise interest rates for the first time. AI-related stocks experienced volatile swings, with Marvell Technology surging 11.1% after a week of extreme fluctuations, including a 32.5% one-day gain fueled by speculation it could become a trillion-dollar company. Chipmakers Lam Research and KLA also climbed 12.7% and 12.9%, respectively, while Oracle’s stock fell 8.5% despite stronger-than-expected profits, as the company plans to raise $40 billion in cash for AI investments. Investors remain cautious about overvalued AI stocks amid concerns of a potential bubble. The bond market reacted positively, with the yield on the 10-year Treasury dropping to 4.45% from 4.55% as lower oil prices reduced inflationary pressures. Analysts suggest a sustained decline in oil prices could allow the Federal Reserve to maintain current interest rates, supporting broader market stability. Meanwhile, the market’s rollercoaster ride reflects ongoing uncertainty over AI-driven valuations and geopolitical risks.