Stocks Rally on Hopes of Iran-U.S. Strait of Hormuz Deal

U.S. Treasury Secretary Scott Bessent told CNBC that Washington and Tehran could reach a deal to open the Strait of Hormuz by Wednesday. Global risk appetite jumped. U.S. stocks surged overnight. Asian markets followed higher Wednesday.

Bessent said the deal would mean "freedom of movement" for the waterway. When asked whether Iran would be allowed to charge a toll, he replied: "It would be freedom of movement." Before the war, about 20% of the world's crude oil passed through the Strait.

The U.S. Central Command posted on X that the southern route remains free and open for all commercial vessels. Tensions persist. Iran claimed President Donald Trump could "ignite the spark of World War 3," according to a report.

Earnings added to the mix. Advanced Micro Devices beat second-quarter expectations. The chipmaker reported $808 million in capital expenditure, up from $282 million a year ago and $389 million in the prior quarter. Its stock fell in extended trading. AlphaScala's proprietary scoring gives AMD a 42 out of 100, labeled Mixed, reflecting the tension between earnings strength and rising spending.

SpaceX also posted better-than-expected revenue in its first earnings since its June IPO. Capex concerns sent its stock down about 7% in extended trading. Paramount Skydance raised its full-year profit guidance after revenue beat and streaming gains.

Meanwhile, European heatwaves are not deterring Asian travelers. Searches for European destinations by Asian travelers rose 57% year on year during July-August, with improved conversion from search to booking, said Edmund Ong, senior regional director at Trip.com.

Iran claimed Trump could "ignite the spark of World War 3," according to a report.