US stocks jump to their best day in 2 months on hopes for a deal to get
crude flowing globally again
[June 12, 2026] By
STAN CHOE and ALEX VEIGA
NEW YORK (AP) — U.S. stocks rallied to their best day in two months, and
oil prices fell Thursday after President Donald Trump called off his
threat to bomb Iran in the evening. That raised hopes for a potential
deal that could get the global flow of oil going again.
The S&P 500 jumped 1.8%, coming off a back-to-back drop that had yanked
it back to where it was in early May. The Dow Jones Industrial Average
leaped 929 points, or 1.9%, and the Nasdaq composite rallied 2.5%.
Stocks immediately veered higher in midday trading after Trump said on
his social media network that “discussions with the Islamic Republic of
Iran have been brought to the highest level of Iranian leadership and
approved” and that the time and place of a signing will “be announced
shortly.”
A deal to end the war with Iran could reopen the Strait of Hormuz and
allow oil tankers to carry crude again from the Persian Gulf to
customers worldwide. The price for a barrel of benchmark U.S. crude sank
2.6% to $87.71. Brent crude, the international standard, fell 2.9% to
$90.38, though it’s still above its roughly $70 price from before the
war.
Worries had been high because the United States and Iran launched
attacks over the past several days threatening a more than monthlong
tenuous ceasefire.
High oil prices caused by the Iran war have sent inflation painfully
upward, and a report on Thursday showed that prices at the U.S.
wholesale level increased by more in May than economists expected. The
effect is worldwide, and the European Central Bank on Thursday became
the first major central bank to raise interest rates in response.
Higher rates can keep a lid on inflation. But they also slow economies
and undercut prices for all kinds of investments, including stocks and
cryptocurrencies. They hit investments seen as the most expensive in
particular, and some critics are calling the artificial-intelligence
industry a bubble where investment inflated too far.
Big swings for AI stocks have been yanking the U.S. stock market up and
down over the last week, as they went from roaring to records to
suddenly turning lower. The big concern is whether such stocks shot too
high, too fast because of AI mania, and their careening moves have
sometimes reversed direction by the hour.
AI stocks had already been rolling back up their roller coaster early
Thursday, before Trump made his announcement on Iran.
Marvell Technology climbed 11.1%. It’s coming off a manic stretch where
it plunged 16.7%, soared 9.6% and then fell more than 5% for two
straight days. Just before that, it had a one-day surge of 32.5% that
was its best in history when Nvidia CEO Jensen Huang suggested it could
be “the next trillion-dollar company.” It was worth a bit more than $190
billion at the time.
Companies involved in the making of chips, meanwhile, jumped to some of
the market’s biggest gains. Lam Research leaped 12.7%, and KLA climbed
12.9%.
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A trio of traders work on the floor of the New York Stock Exchange,
Wednesday, June 3, 2026. (AP Photo/Richard Drew)
 They helped offset an 8.5% drop for
Oracle. It reported a stronger profit for the latest quarter than
analysts expected, but it also said it expects to raise $40 billion
in cash this fiscal year through borrowing and sales of its stock.
That comes after it raised $48 billion last fiscal year to help pay
for AI investments.
Other companies’ stocks have also been punished recently for
announcing heavy spending on AI, as the question remains whether
such investments will produce the profits and productivity that AI
proponents are promising.
All told, the S&P 500 jumped 127.31 points to 7,394.30. The Dow
Jones Industrial Average rose 929.97 to 50,848.75, and the Nasdaq
composite rallied 640.16 to 25,809.66.
In the bond market, Treasury yields eased sharply as falling oil
prices meant less upward pressure on inflation. The yield on the
10-year Treasury dropped to 4.45% from 4.55% late Wednesday, which
is a significant move for the bond market.
A sustained drop in oil prices could allow the Federal Reserve to
keep its main interest rate on hold this year, instead of hiking it
as many traders suspected it may have to because of high inflation
and a solid U.S. job market. Following Trump’s announcement, traders
ratcheted back their bets for a possible increase to the federal
funds rate this year, according to data from CME Group.
The Fed could even resume its cuts to interest rates under its new
chair, Kevin Warsh, if inflation pressures subside enough. Trump
appointed Warsh, and Trump has been loudly calling for lower
interest rates.
Stocks of smaller companies can feel the biggest benefit from easier
interest rates because many need to borrow money to grow, and the
Russell 2000 index of the smallest U.S. stocks jumped a
market-leading 3%.
In stock markets abroad, indexes rose modestly in Europe following a
mixed finish in Asia.
London’s FTSE 100 rose 0.5%, and Hong Kong’s Hang Seng fell 0.7% for
two of the world’s bigger moves.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to
this report.
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