NEW YORK (AP) — Stocks rose around the world and oil prices fell Wednesday as hopes grew that the war with Iran could end soon. This is despite the fact that some of the signs that investors saw as hopeful are already in dispute, and several previous episodes of optimism in financial markets were quickly undermined by the continued fierce fighting of the war.
The S&P 500 rose 0.7%, adding to the previous day’s jump, which was the best since last spring. This followed even bigger gains in European and Asian stock markets, including an 8.4% rise in South Korea, which were catching up with Wall Street’s rally on Tuesday.
The Dow Jones Industrial Average rose 224 points, or 0.5%, and the Nasdaq composite rose 1.2%.
Oil prices also fell back to $100 a barrel after President Donald Trump said late Tuesday that the U.S. military could end its offensive within two to three weeks.
That added to the optimism following a pair of weak signs of hope early Tuesday that Wall Street clung to, including a news report that quoted Iran’s president as saying he has “the necessary will to end the war” as long as certain requirements are met, including “guarantees to prevent a recurrence of aggression.”
The worry on Wall Street has been that the war could last a long time and keep Persian Gulf oil and natural gas out of global markets, which could create a brutal explosion of inflation.
But hope has quickly turned to doubt on Wall Street, causing manic swings back and forth in financial markets since the war with Iran began. Trump also made statements that boosted markets, only to see the gains quickly disappear after he increased his military threats.
Shortly before Wall Street began trading on Wednesday, Trump stated in a post on his social network that Iran “just asked the United States of America for a ceasefire.”
“We will consider when the Strait of Hormuz will be open, free and clear. Until then, we will be throwing Iran into oblivion or, as they say, back to the Stone Age!!!”
But Iranian Foreign Ministry spokesman Esmail Baghaei quickly called that claim “false and baseless,” according to a report on Iranian state television.
Oil prices also remain high, even if they have dropped recently. The price of a barrel of Brent crude oil, the international standard, was around $101 after its declines, still higher than around $70 before the war began.
Gasoline prices in the United States rose again overnight to a national average of $4.06 per gallon, according to the AAA automobile club.
Meanwhile, Iran attacked an oil tanker off the coast of Qatar and Kuwait airport on Wednesday, while airstrikes hit Tehran as fighting continued. Iran also continues to control the Strait of Hormuz, through which a fifth of the world’s traded oil passes during peacetime.