US Stocks Rally on Iran Diplomacy Hopes, Oil Price Drop

U.S. stocks surged Tuesday, approaching record highs, as investors grew optimistic about renewed diplomatic efforts between the United States and Iran to end their ongoing war, while easing oil prices offered relief from inflation pressures.

The S&P 500 climbed 81.14 points, or 1.2 percent, to close at 6,967.38, just 0.2 percent shy of its January record. The Dow Jones Industrial Average rose 317.74 points, or 0.7 percent, to 48,535.99. The Nasdaq composite gained 455.35 points, or 2 percent, ending at 23,639.08. The advances followed gains in global markets, with South Korea's Kospi index up 2.7 percent and Japan's Nikkei 225 rising 2.4 percent.

The rally came amid reports of back-channel diplomacy aimed at scheduling a new round of talks, potentially in Pakistan within days. U.S. President Donald Trump told the New York Post that negotiations to end the conflict could resume soon, following the collapse of weekend discussions that led to a U.S. blockade of Iranian ports. Officials noted that while a temporary ceasefire has held, tensions persist over the Strait of Hormuz, a vital chokepoint for about 20 percent of global oil supply. Blockages there have disrupted shipments...