Stock market today: Dow, S&P 500, Nasdaq rebound, oil prices reverse on hopes of a US-Iran peace deal

May 22, 2026 - 04:21

Wall Street staged a broad recovery on Wednesday, with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all closing higher after a shaky start to the week. The turnaround was fueled by a sharp reversal in oil prices, which dropped on growing speculation that the United States and Iran may be moving toward a diplomatic resolution. Traders welcomed the possibility of eased geopolitical tensions, which helped lift sentiment across risk assets.

The Dow gained more than 200 points, while the S&P 500 and Nasdaq each rose roughly 0.6 percent. Energy stocks took a hit as crude prices fell more than 4 percent, but gains in technology and consumer discretionary sectors offset the losses. Investors also digested a batch of mixed economic data, including a slight uptick in jobless claims and a modest slowdown in manufacturing activity.

The potential for a US-Iran peace deal has been a key driver of the oil market's recent volatility. Any agreement that lifts sanctions on Iranian crude exports could add significant supply to global markets, pushing prices lower. Analysts cautioned that negotiations remain fragile, but the mere prospect of a thaw was enough to spark a broad risk-on move.

Despite the day's gains, some market participants remained cautious, noting that the rally came on relatively light volume. The rebound follows a period of uncertainty driven by lingering inflation concerns and uncertainty over the Federal Reserve's next policy moves. For now, traders appear willing to bet that lower energy costs will help cool price pressures and support corporate profits.