Hopes for a deal between the United States and Iran to restore navigation through the Strait of Hormuz propelled stock markets to record highs, with a batch of strong corporate earnings also igniting enthusiasm on Wall Street.

The S&P 500 Index and the Dow Jones Industrial Average both reached new all-time highs.

The Nasdaq 100 Index surged 3.3%.

The Philadelphia Semiconductor Index recorded its largest four-day gain since 2020.

The likelihood of a temporary agreement between the US and Iran focused on the Strait of Hormuz appears to be rising, with Qatar indicating that a proposal has been drafted.

US Treasury Secretary Scott Bessent stated that an agreement regarding the reopening of the Strait of Hormuz could be reached today or tomorrow.

"The market is reacting to the possibility of the Strait of Hormuz reopening, which could help normalize global oil supplies and ease recent pressure on energy prices," said Tony Miano of Wells Fargo Investment Institute. "Lower oil prices can alleviate inflation concerns."

However, Miano cautioned that despite this, inflation is unlikely to return to normal overnight.

While energy-related pressures may ease, overall price levels are likely to remain elevated in the near term, thereby reducing the scope for a decline in Treasury yields.