US stocks open higher after peace proposal to Iran

NEW YORK: Wall Street stocks opened markedly higher on Wednesday after Washington proposed a 15-point peace plan to Iran, raising hopes of an eventual off-ramp to the Middle East war.

The jump in US equities tracked similar rises in Asia and Europe over the Trump administration plan, which Pakistani officials told AFP had been delivered via Islamabad to Tehran.

READ MORE: Wall Street mixed after relief rally

News of the peace proposal also sent oil prices tumbling over five percent, with Brent back below $100.

About 15 minutes into trading (1400 GMT), all three major US indices were up over one percent, after finishing down on Tuesday.

The Dow Jones Industrial Average and broad-based S&P 500 were both up 1.1 percent to 46,638.75 and 6,627.34, respectively, while the tech-rich Nasdaq Composite jumped 1.4 percent to 22,064.56.

“Right now the big attention for the market is on whether we get a ceasefire or not between the US and Iran,” Adam Sarhan of 50 Park Investments told AFP.

Noting Iranian officials have publicly rejected the idea of talks, Sarhan added that Wednesday’s rise in stock prices “is the market telling me that they still believe a ceasefire will get done.”

“It might not be immediate, but eventually cooler heads will prevail.”

Analysts have cautioned however that Washington’s moves toward peace talks coincide with the deployment of more US troops in the Middle East, and continued exchange of missile fire between and Iran and Israel.

“There might also be a measure of confusion, as market participants try to determine who is actually calling the shots for Iran and who is engaging with authority in the reported negotiations with the US,” said Briefing.com‘s Patrick O’Hare in a note.

“That confusion, nonetheless, is overlaid with the hope that this peace proposal is another breadcrumb leading the US to an off-ramp in its war with Iran.”

Among individual companies, British microprocessor giant Arm Holdings jumped 16 percent after announcing its first AI chip designed and manufactured entirely in-house.

Telecom firm EchoStar also rose over eight percent following a report by tech outlet The Information which said SpaceX is preparing to file for its IPO.

Echostar sold several billion dollars’ worth of its spectrum rights to Elon Musk’s space firm and also holds a stake in the company.