S&P 500 Regains 6,000 Level After Trump Says Iran Has Reached Out: Markets Wrap

Wall Street traders fixated on the latest developments in the Middle East drove stocks higher after President Donald Trump said Iran has reached out about the possibility of negotiations, bolstering hopes Tehran's conflict with Israel will de-escalate. Oil erased gains.

The S&P 500 topped 6,000. Trump said Iranians have suggested they visit the White House, while also adding there's a “big difference” in talks now compared to a week ago. When asked about possible Iran strikes, Trump said: “I may do it. I may not do it. Nobody knows what I'm going to do.” Meantime, Trump also said he told Israel Prime Minister Benjamin Netanyahu to “keep going,” but added he gave no indication that US forces would get involved.

Stocks rise on Mideast hopes.

If the US were to approve direct military action alongside Israel, it would improve the chances of permanently ending Iran's path to a nuclear weapon — but risk throwing the oil-rich region into widespread conflict. Meantime, Iran's missile and drone attacks on Israel appear to be subsiding, prompting Israeli authorities to relax some safety restrictions.

Just hours away from the Federal Reserve decision, Treasury yields edged lower as traders bet on just shy of two rate cuts this year — with the first move fully priced in for October. Data showing jobless claims stabilizing near the highest levels in eight months did little to alter those wagers. The dollar was little changed. US financial markets will be closed Thursday for a holiday.

“It has been a seesaw week so far,” said Matt Maley at Miller Tabak. “This is especially true given that a lot will depend on what the Fed says today and what happens in the Middle East as well.”

The Fed is widely expected to leave rates unchanged for a fourth straight meeting, reiterating it needs more clarity on the impacts of a wide array of government policies before adjusting borrowing costs. Officials may continue to pencil in two rate cuts this year, but some economists say the “dot plot” could show just one.

The decision will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.

Options pros are betting the S&P 500 to move 1% in either direction, according to data compiled by Piper Sandler & Co. That's the smallest implied swing ahead of a Fed day since January.

“We had a better-than-expected core inflation reading in May, a long-awaited downside inflation surprise,” said Naomi Fink at Nikko Asset Management. “But one swallow does not a summer make, and since then we also had a spike in oil prices on geopolitical risk. Moreover, the price of oil alone is not the only risk.  Even before the escalation of the Israel-Iran conflict, we had signals of tighter global supply chains.”

Meanwhile, Fink notes that US employment data remains firm — which argues against a near-term rate cut.  

Will Compernolle at FHN Financial says that while the bond market may sell off from any perceived hawkishness, Treasuries are currently priced consistently with what the Fed will communicate this afternoon. 

“As a result, any cheapening today will provide a good buying opportunity before the market gradually consolidates closer to fair value,” he said.

Corporate Highlights:

• Nippon Steel Corp. closed its $14.1 billion takeover of United States Steel Corp., bringing to an end an 18-month effort to combine the American and Japanese steelmakers, the companies said in a Wednesday statement.

• Texas Instruments Inc. touted plans to spend more than $60 billion on semiconductor plants in the US, making it the latest chipmaker to promote its domestic manufacturing ambitions as the Trump administration urges investments and threatens to upend the sector with tariffs.

• OpenAI Chief Executive Officer Sam Altman said Meta Platforms Inc. has offered his employees signing bonuses as high as $100 million, with even larger annual compensation packages, as it seeks to build a top artificial intelligence team.

• Marvell Technology Inc. rose, with analysts positive on the chipmaker following an event focused on AI. At the event, Marvell raised its overall data center total addressable market to $94 billion by 2028, up from $75 billion.

• Nucor Corp.'s second-quarter earnings forecast beat the average analyst estimate.

• Airbus SE is targeting a higher dividend payments to shareholders as earnings remain resilient despite uncertainty from tariffs and supply chain snags that have slowed deliveries of its aircraft.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6% as of 10:48 a.m. New York time

• The Nasdaq 100 rose 0.6%

• The Dow Jones Industrial Average rose 0.7%

• The Stoxx Europe 600 fell 0.1%

• The MSCI World Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.2% to $1.1500

• The British pound rose 0.1% to $1.3449

• The Japanese yen rose 0.3% to 144.80 per dollar

Cryptocurrencies

• Bitcoin rose 0.6% to $105,042.09

• Ether rose 0.5% to $2,525.3

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.37%

• Germany's 10-year yield declined three basis points to 2.50%

• Britain's 10-year yield declined five basis points to 4.50%

Commodities

• West Texas Intermediate crude fell 1.4% to $73.78 a barrel

• Spot gold was little changed