Wall Street flirts with a record after its big rally the last 2 weeks

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NEW YORK (AP) — U.S. stocks are flirting with a record Wednesday following their big rally over the last two weeks as hopes built that the global economy can avoid a worst-case scenario because of the U.S.-Iran war.

The S&P 500 rose 0.1% in morning trading and at one point was on track to eclipse its all-time high set in January. The Dow Jones Industrial Average was down 174 points, or 0.4%, as of 10:05 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.

The U.S. bond market also held relatively steady as mediators moved closer to extending the ceasefire between the United States and Iran and restarting negotiations before the agreement expires next week.

After falling nearly 10% below its record in late March, a drop steep enough that Wall Street calls it a “correction,” the S&P 500 has roared roughly 10% higher. That move was mostly on expectations for calming tensions to come in the war and a resumption of the full flow of oil from Persian Gulf producers to customers worldwide through the Strait of Hormuz.

If those expectations get undercut, which has happened before in the war, stocks could easily resume their fall. Oil prices drifted up and down on Wednesday and showed that caution remains in financial markets.

The price for a barrel of Brent crude, the international standard, was flat at $94.79. That’s still well above its roughly $70 price from before the war, though it’s down from its $119 peak when worries about the fighting have been at their heights.

But if U.S.-Iran talks do happen and if they are successful, the war could end up being only a temporary setback for the global economy instead of a new normal of very high oil prices and inflation. And that in turn could allow investors to return their attention to what ultimately matters most for stock prices: money.

Through all the day-to-day noise that can affect investors’ opinions, stock prices tend to move with the direction of corporate profits over the long term. And positive trends there had stock markets worldwide doing well before the war began. Analysts also see continued growth ahead, for now at least.

Bank of America rose 1.2% Wednesday after saying it made $8.6 billion in profit during the first three months of the year. That’s up 17% from a year earlier and more than analysts expected.

CEO Brian Moynihan said the bank saw signs of a “resilient American economy,” including solid spending by U.S. consumers. Trends were encouraging enough that the bank set aside less money to cover potential credit losses during the quarter than it did a year earlier.

Morgan Stanley jumped 4.3% after the investment bank likewise delivered a better-than-expected quarter of results.

Companies hurt earlier in the year by worries about artificial-intelligence technology also rose to recover more of their losses for 2026. Some of the worries were about companies potentially spending too much to build out their AI capabilities, while others focused on businesses that may go obsolete because of AI-powered competition.

The concerns got so deep that they shook private-credit companies that have lent money to software businesses and others that may be unable to pay their debts because of AI.

ServiceNow climbed 6.1%, Oracle rose 4.7% and Ares Management gained 4.8% for some of the market's bigger gains. All are still down between 12% and 40% for the year so far.

Nike rose 2.7% after CEO Elliott Hill and Tim Cook — a Nike director and the CEO of Apple — disclosed that they purchased a combined 48,000 shares of the athletic shoe maker at a cost of about $1 million each. Nike shares are still down nearly 29% this year.

On the losing end of Wall Street was PNC Financial Services Group. It slipped 0.8% following a mixed quarterly report, where its profit topped analysts' expectations but its revenue fell short.

In stock markets abroad, indexes were mixed in Europe following modest gains in Asia.

In the bond market, the yield on the 10-year Treasury edged up to 4.27% from 4.26% late Tuesday.

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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.

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This version corrects the last name of Nike's CEO, which is Hill.