Oil retreats, stocks rise on cautious Mideast war hopes

BSS

21 May 2026, 09:44

Oil retreats, stocks rise on cautious Mideast war hopes

NEW YORK, May 21, 2026 (BSS/AFP) - Stock markets jumped Wednesday while oil prices fell with bond yields after President Donald Trump said American negotiators were close to a potential peace accord with Iran.

Crude prices had earlier been pressured by Iranian statements that it had allowed around two dozen ships to transit the Strait of Hormuz.

But oil fell further and stocks rose more following Trump's statements in the late morning about the state of play between Tehran and Washington, despite their similarity to earlier Trump utterances suggesting an imminent deal that didn't materialize.

"We're in the final stages of Iran, we'll see what happens," Trump told reporters. "We'll either have a deal or we're going to do some things that are a little bit nasty. But hopefully that won't happen."

Later Wednesday, Trump described talks with Iran as "on the borderline" between a deal to end the Middle East war and a resumption of strikes on Iran.

All three major US indices powered higher, with the Dow winning 1.3 percent and the Nasdaq 1.5 percent.

Oil prices slid more than five percent while yields on the 30-year US Treasury bond retreated from Tuesday's 19-year peak.

"We've been hearing about negotiations for two months, so investors are taking President Trump's rhetoric with a cautious tone," said Jack Ablin of Cresset Capital.

Ablin said Wednesday's gains were also fueled by positive results from big-box retailers such as Target, as well as anticipation of earnings later Wednesday from chip giant Nvidia, which has a record of sometimes buoying the broader equity markets.

While Asian markets mostly fell in the wake of losses on Wall Street Tuesday, European indexes gained as bond yields fell back from inflation-driven highs.

Oil prices were also under pressure, with the main US contract, WTI, falling under $100 per barrel, but sticking well above pre-war levels.

Earlier Wednesday, a South Korea-flagged tanker transited the Strait of Hormuz, one of 26 that Iran's Revolutionary Guards later said it had allowed to pass over the past 24 hours.

Since the United States and Israel began their war with Iran, the Strait of Hormuz -- an energy corridor through which 20 percent of global crude usually transits -- has been effectively closed to shipping.

"Oil remains the central macro pressure point," said Sucden Financial analyst Viktoria Kuszak.

"We expect the combination of higher yields, a firm dollar and unresolved energy risk to keep risk appetite constrained, with Nvidia earnings the next key test for equity sentiment," she added.

A majority of US Federal Reserve policymakers indicated that interest rate hikes could be needed if inflation continued to run persistently above the central bank's two-percent target, according to minutes of their last meeting.

- Key figures at around 2015 GMT -

Brent North Sea Crude: DOWN 5.6 percent at $105.02 a barrel

West Texas Intermediate: DOWN 5.7 percent at $98.26 a barrel

New York - DOW: UP 1.3 percent at 50,009.35 (close)

New York - S&P 500: UP 1.1 percent at 7,432.97 (close)

New York - Nasdaq: UP 1.5 percent at 26,270.36 (close)

London - FTSE 100: UP 1.0 percent at 10,432.34 (close)

Paris - CAC 40: UP 1.7 percent at 8,117.42 (close)

Frankfurt - DAX 30: UP 1.4 percent at 24,737.24 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 59,804.41 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 25,651.12 (close)

Shanghai - Composite: DOWN 0.2 percent at 4,162.18 (close)