US stock markets edged just below record levels as oil prices declined on growing hopes that a diplomatic agreement between the United States and Iran could soon reopen critical Persian Gulf shipping lanes. The benchmark Brent crude oil price slipped below $101 per barrel, retreating from recent highs above $115 amid renewed optimism that oil tanker deliveries will resume.
The easing in crude prices comes as Pakistan, acting as a mediator, expressed expectations that a deal to end hostilities between the US and Iran may be imminent. Such an agreement would potentially reopen the Strait of Hormuz, which has been effectively closed during ongoing tensions and conflicts, restricting tanker movement and driving up global oil and gasoline prices.
Despite the oil price drop, energy costs remain significantly elevated compared to pre-conflict levels. Meanwhile, Wall Street showed cautious gains. The S&P 500 slipped slightly from its record set the previous day, reflecting mixed investor sentiment. The Dow Jones Industrial Average fell by 244 points, or roughly half a percent, while the Nasdaq composite edged down 0.1% from its own peak.
This market reaction follows a pattern seen before, where hopes of diplomatic progress lead to strong rallies that can quickly reverse if negotiations stall or conflict escalates again. Tensions remain high after recent confrontations in the Gulf of Oman, including a US fighter jet targeting an Iranian tanker attempting to bypass the American blockade of Iranian ports.
Beyond geopolitical developments, the US stock market has found support from a series of robust corporate earnings reports surpassing analyst expectations for the first quarter. This earnings momentum underpins longer-term investor confidence, as share prices generally align with profitability trends over time.
Among the top gainers, Datadog surged more than 25% after reporting profits well above forecasts. Specialty chemicals firm Albemarle climbed over 6%, bolstered by stronger-than-anticipated returns. Axon Enterprise, a maker of non-lethal weapons and counter-drone technologies, jumped over 10% following an upward revision of its annual revenue outlook.
In contrast, Whirlpool’s shares dropped by more than 12% after posting weaker results and announcing the steepest price increases for its North American appliances in a decade as it grapples with declining consumer confidence and cost pressures. Restaurant chain Shake Shack plunged over 28% after delivering earnings far below market expectations.