Bond yields, oil fall amid hopes for Iran deal; stocks end up with chip shares
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 29, 2026. REUTERS/Brendan McDermid
NEW YORK/LONDON, May 20 : U.S. Treasury yields and oil prices fell on Wednesday as hopes increased that the U.S. is nearing a deal with Iran to end the war in the Middle East, while major stock indexes rose with chipmaker shares ahead of Nvidia's quarterly results.
Investors continued to monitor headlines for signs of progress in U.S. negotiations with Iran to end the war. U.S. President Donald Trump said on Wednesday that negotiations with Iran were in the final stages, while warning of further attacks unless Iran agrees to a deal. Trump also said the United States was willing to wait a few days for the "right answer" from Iran.
The U.S. dollar fell from a six-week high, while U.S. crude fell $5.89 to settle at $98.26 a barrel. Brent dropped $6.26 to settle at $105.02.
There were also tentative signs of easing pressure from the Gulf on Wednesday, as two Chinese oil tankers exited the Strait of Hormuz, shipping data showed.
The yield on benchmark U.S. 10-year notes fell 9.4 basis points to 4.576 per cent, from 4.669 per cent late on Tuesday. Yields had risen to multiyear highs recently on war-driven inflation fears.
Nasdaq led gains on Wall Street, while consumer discretionary was up the most among S&P 500 sectors.
"There's renewed positive sentiment because oil prices are down, yields are down," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
But he added: "There is pessimism on the horizon because higher oil prices for longer put the Fed in a corner."
Fed funds futures traders are pricing in roughly 50 per cent odds that the Federal Reserve will raise rates by December - a sharp reversal from before the Iran war began in late February, when markets had expected two cuts this year.
The Dow Jones Industrial Average rose 645.47 points, or 1.31 per cent, to 50,009.35, the S&P 500 rose 79.36 points, or 1.08 per cent, to 7,432.97 and the Nasdaq Composite rose 399.65 points, or 1.55 per cent, to 26,270.36.
MSCI's gauge of stocks across the globe rose 9.86 points, or 0.90 per cent, to 1,101.65.
The pan-European STOXX 600 index rose 1.46 per cent.
Longer-dated bonds have also sold off in Europe and Japan, but as with Treasuries, they found some relief on Wednesday.
Germany's 10-year yield, the euro zone benchmark, fell 3 basis points from Tuesday's 15-year high to 3.16 per cent.
Benchmark 10-year U.S. Treasury yields reached a 16-month high on Tuesday, while 30-year yields hit their highest level since 2007.
NVIDIA RESULTS, SPACEX FILING
Nvidia shares were down slightly after the closing bell, with the company forecasting second-quarter revenue above Wall Street expectations and announcing an $80 billion share repurchase program. Its stock ended the regular session up 1.3 per cent. An index of semiconductors ended the session up 4.5 per cent.
Also after the closing bell, SpaceX unveiled its IPO filing, opening the books of the company that has revolutionized rocket technology. The listing is poised to become the first trillion-dollar U.S. market debut.
In currency markets, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.22 per cent to 99.09, with the euro up 0.22 per cent at $1.163.Against the Japanese yen, the dollar weakened 0.14 per cent to 158.81.
Spot gold rose 1.39 per cent to $4,543.55 an ounce.
