Dow jumps 500 points as oil and bond yields retreat: Live updates

Stocks jumped on Wednesday as oil prices and U.S. Treasury yields slid amid growing optimism among investors that the conflict in the Middle East could soon be resolved. Traders also looked ahead to the release of Nvidia’s first-quarter earnings report.

The Dow Jones Industrial Average traded up 501 points, or 1%. The S&P 500 rose 0.9%, while the Nasdaq Composite added 1.3%.

West Texas Intermediate futures shed 4% to trade around $99 per barrel. Brent crude pulled back 5% to around $105 a barrel. That’s after Trump told reporters the administration was in the “final stages” of negotiations with Iran, per a pool report.

Treasury yields also cooled substantially following the developments. The 10-year yield dropped 9 basis points on Wednesday, and the 30-year yield shed 7 basis points. (1 basis point equals 0.01%.).

The bond market spooked investors in recent days as the 30-year Treasury yield hit its highest level since 2007 and the 10-year yield also neared multi-year highs. There is growing concern that inflation is reigniting because of higher oil prices and that the Federal Reserve, soon to be lead by Kevin Warsh, is behind the curve in fighting it. The rise in rates could derail an economy already under threat from higher energy costs.

Traders are also expecting the minutes from the Federal Reserve’s April meeting, which are due on Wednesday at 2 p.m. ET.

Investors are turning their attention toward Nvidia, which reports its first-quarter earnings after the close. The report will be an important view into the artificial intelligence trade and provide the latest update on demand for chips. Shares of the company were last 2% higher.

“Nvidia is the most important AI stock, and since so much of the stock market’s gains over the past few years have been driven by the incredible capabilities of AI, the outcome of Wednesday’s earnings report means everything for this market,” said James Demmert, chief investment officer at Main Street Research.

The stock has risen almost 21% this year, and Demmert noted that while there is skepticism build into the chipmaker and AI darling, especially given its massive run of more than 1,400% in the last five years, expectations are “somewhat muted” going into the report.

“The sticking points in Nvidia’s earnings report are any signs of margin compression due to rising memory prices, along with how the company is navigating sales in China,” he added.