On Wednesday, Wall Street's benchmark S&P 500 and the tech-heavy Nasdaq closed at record highs, driven by optimism over easing U.S.-Iran tensions and strong earnings expectations, which boosted risk appetite. Oil prices stabilized after reports suggested Iran might facilitate vessel movement around the Strait of Hormuz.

U.S. President Donald Trump stated that the war initiated with Israel is "approaching its conclusion," and the White House expressed optimism about reaching an agreement. However, industry insiders noted that the Strait of Hormuz, a critical global passage for oil and gas shipments, is currently seeing only a fraction of its usual traffic.

An informed source in Tehran indicated that Iran might consider allowing vessels to navigate freely on the Omani side of the strait if an agreement is reached to prevent further conflict.

The S&P 500 rose 0.80% to 7,022.95, while the Nasdaq Composite climbed 1.60% to 24,016.02. In contrast, the Dow Jones Industrial Average fell 0.15% to 48,463.72.

David Seif, Chief Economist for Developed Markets at Nomura, commented, "Equities, particularly in the U.S., have rebounded quite positively, reflecting confidence that this event may be over or nearing its end," referring to supply disruptions caused by the Strait of Hormuz closure. In an interview conducted on Tuesday and aired Wednesday, he added, "I think it's close to the end."

White House Press Secretary Levitt stated during a press briefing, "We feel good about the prospects of reaching a deal."

Rising profits reported by major banks kicked off an earnings season that analysts expect will show growth across the S&P 500. Both Bank of America and Morgan Stanley posted strong first-quarter results, driving their shares up 1.8% and 4.5%, respectively.

Oil prices steadied after a sharp drop in the previous session, as the Strait of Hormuez blockade offset optimism about peace talks. Energy consultancy Gelber & Associates noted that the number of tankers transiting the strait, while still low, is gradually increasing. Analysts stated that the market "is no longer pricing in a full shutdown but still holds a residual premium due to uneven, rather than normalized, flow recovery."

U.S. crude settled up 0.01% at $91.29 per barrel, while Brent crude rose 0.15% to $94.93. Support for oil prices came from a larger-than-expected weekly decline in U.S. crude inventories reported by the Energy Information Administration.

The U.S. dollar was nearly unchanged with slight fluctuations, on track for an eighth consecutive day of declines. The dollar index, which measures the currency against six major peers, last rose 0.01% to 98.08.

Juan Perez, Senior Trader at Monex US, remarked, "We are not only swayed by conflict headlines; the focus now will shift to economic growth."

Ongoing caution stemming from Middle East hostilities led to a decline in U.S. Treasury prices, reversing some of their recent gains. The two-year Treasury yield, which often moves with expectations for the Federal Reserve's next rate decision, rose 1 basis point to 3.761%. The 10-year yield increased 2.5 basis points to 4.282%.

Nomura's Seif noted that disruptions to global energy markets from the Iran conflict have a greater impact on European markets than on the U.S., as the U.S. is a net energy exporter. He added, "If you look at U.S. Treasury prices versus European bonds, U.S. Treasuries are not optimistic, but the negative impact is arguably much smaller."

The yield on Germany's benchmark 10-year bond rose 1.5 basis points to 3.045% from 3.03% late Tuesday.