Wall Street hits an all-time high after adding to its weekslong rally

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

The S&P 500 rose 0.8% and was on track to eclipse its all-time high set in January. After falling nearly 10% below its record in late March, a drop steep enough that Wall Street calls it a "correction," the index at the heart of many 401(k) accounts has since roared roughly 10% higher.

Much of the rally has been due to expectations for calming tensions in the war and a resumption of the full flow of oil from the Persian Gulf to customers worldwide through the Strait of Hormuz. Hopes remained high Wednesday as regional officials told The Associated Press that the United States and Iran had an "in principle agreement" to extend a ceasefire to allow for more diplomacy.

To be sure, stocks could easily get back to falling if those expectations get undercut, which has happened before in the war. Oil prices drifted up and down Wednesday and showed that caution remains in financial markets. Stock indexes around the world also made only modest movements following their big gains in recent weeks.

The price of Brent crude, the international standard, edged up 0.1% to settle at $94.93 per barrel. 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.

A barrel of U.S. crude oil for May delivery inched up less than 0.1% to settle at $91.29.

The Dow Jones Industrial Average was down 52 points, or 0.1%, as of 3:09 p.m. Eastern time, and the Nasdaq composite was 1.4% higher.

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 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 doing well before the war began. Analysts also see continued growth ahead, for now at least.

Bank of America rose 2% 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 also said the bank saw signs of a "resilient American economy," including solid spending by U.S. consumers.

Morgan Stanley jumped 4.7% 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 concerns were about companies potentially spending too much to build out AI capabilities, while others focused on businesses that may go obsolete because of AI-powered competition.

The worries got so deep that they shook private-credit companies that have lent money to software businesses and others potentially under threat because of AI.

ServiceNow climbed 7.8%, Oracle rose 4.6% and Ares Management gained 6.3% for some of Wednesday's biggest gains in the S&P 500. All are still down between 12% and 38% for the year so far.

With stock prices overall back to where they were in January, and with analysts' expectations for upcoming profits from big U.S. companies only rising since then, optimists say many stocks look less expensive than they did a few months ago.

"Today, we see compelling opportunity potential" to shift into areas of the market that look like better buys than earlier this year, such as technology stocks, said Mason Mendez, investment strategy analyst at Wells Fargo Investment Institute.

The stock price of Allbirds surged more than 600% to top $18 after the company said it's shifting gears and moving into the AI compute infrastructure industry, while changing its name to NewBird AI. The Allbirds name will stay with the shoe brand that the company has already agreed to sell to American Exchange Group.

Nike rose 3.7% 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 about 28% this year.

On the losing end of Wall Street was ASML. The Dutch company, whose machinery helps make chips, fell 5.4% after giving a forecasted range for upcoming revenue whose midpoint fell below analysts' expectations. Its stock is nevertheless still up about 34% for the year so far.

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 rose to 4.28% from 4.26% late Tuesday.