Global Markets Rally on Strong Earnings and Hopes for Iran Deal

Global markets continued their upward trend on Wednesday, buoyed by strong corporate earnings reports and hopes for a deal to end the war in Iran. The U.S. stock market hit fresh records, with the S&P 500 surging 1.8% and the Dow Jones Industrial Average adding 1.7%. Profits are piling up for companies as easing oil prices assuage worries about inflation.

The Brent crude price reversed early losses, gaining 1.4% to $80.45 per barrel. Oil prices have swung between $72 and $102 through July on uncertainty about when calm in the Middle East would allow oil tankers to freely exit the Persian Gulf again. Iran and Oman are inching toward a deal to reopen the Strait of Hormuz, contingent on the U.S. lifting its blockade on Iran's ports.

Neil Newman, head of strategy for Astris Advisory Japan, said the market is rallying on the back of AI stocks. Chipmaker Kioxia surged 4.2% and chip testing equipment maker Advantest soared 8.8%. The Sensex slipped 0.2% after the Reserve Bank of India chose to keep its key repo rate unchanged at 5.25%.