Oil Plunge and Iran Winds Boost Dow to All-Time High, Will the Rally Continue?

On the 3rd (local time), the New York stock market closed sharply higher, driven by a plunge in oil prices and easing Iran concerns. The S&P 500 rose 1.5% to 7,600.50, just 0.1% shy of its all-time high, while the Dow Jones Industrial Average jumped 1.3% to 53,178.41, setting a record closing high. The Nasdaq gained 2.1%, showing a strong rebound led by technology stocks.

President Donald Trump’s decision to hold off on additional strikes against Iran sent Brent crude down 4.7% to $83.77 a barrel. As oil, which had traded between $72 and $102 over the past month, began to stabilize, concerns over rekindling inflation eased, and the 10-year U.S. Treasury yield fell from 4.75% to 4.68%. With the Federal Reserve having kept its policy rate at 3.5–3.75% last week, markets appear to have dialed back fears of prolonged high interest rates.

On the earnings front, S&P 500 companies are expected to report spring-quarter earnings per share up 47% year-over-year, sustaining an overall healthy trend. Airlines and cruise lines, including United Airlines and American Airlines, surged more than 5% on the oil price drop, while Boeing jumped 8% on news of 737 MAX-7 certification. However, semiconductor stocks—at the heart of the AI investment boom—exhibited heightened volatility, oscillating between sharp intraday sell-offs and rallies.

In global markets, South Korea’s KOSPI delivered a roller-coaster ride amid the AI bubble debate, plunging 5.1% after soaring 17.9% in the previous session. The yen strengthened following coordinated U.S.–Japan intervention in currency markets, pushing Japan’s Nikkei 225 down 0.9%. With geopolitical tensions easing, commodity prices adjusting, and a weaker dollar, investors have briefly shifted toward risk assets in U.S. equities.