Wall Street rallies to the edge of its all-time high as oil prices ease

NEW YORK (AP) — U.S. stocks rallied to the edge of an all-time high Tuesday, and oil prices eased as hopes climbed that the United States and Iran may try again on talks to end their war and avoid a worst-case scenario for the global economy.

The S&P 500 added 1.2% to its leap from the day before, and the index at the heart of many 401(k) accounts is just 0.2% below its record set in January.

The Dow Jones Industrial Average rose 317 points, or 0.7%, and the Nasdaq composite climbed 2%. They followed gains for stock markets worldwide as diplomats worked through back channels to arrange a new round of talks between the United States and Iran.

If talks succeed and the war ends up being only a temporary setback for the global economy, rather than a new normal of very high oil prices and inflation, investors can turn their attention back to what matters most for stock prices: How much money are companies making?

Positive trends there had stock markets worldwide doing well before the war began, and analysts see continued growth ahead, for now at least.

Lower oil prices help bring down costs for all kinds of businesses, and the price for a barrel of Brent crude to be delivered in June fell 4.6% to settle at $94.79 Tuesday.

While that’s still above its roughly $70 price from before the war began in late February, it’s well below the $119 peak it has hit when worries about the war have been at their heights.

To be sure, hope has often swung quickly into doubt since the war began, which has caused extreme and sudden reversals in financial markets. Much of the stress has been due to the Strait of Hormuz, a narrow waterway that’s the main avenue for crude oil produced in the Persian Gulf area to reach customers worldwide. Blockages there have kept oil off the global market, which has in turn driven up its price.

And that has meant a blast of higher inflation. In the United States, inflation at the wholesale level accelerated to 4% in March from 3.4% the month before, according to the latest data released Tuesday. That was actually better than the 4.6% rate economists expected.

The effect is worldwide. Global inflation this year looks set to accelerate to 4.4% from 4.1% in 2025, according to the International Monetary Fund, which had earlier thought inflation would slow to 3.8%.

The IMF on Tuesday also downgraded its forecast for global economic growth to 3.1% this year from the 3.3% it had forecast in January.

On Wall Street, strong profit reports from companies are helping to make up for such worries. Over the long term, stock prices tend to follow the path of corporate profits, and analysts are forecasting S&P 500 companies will report solid growth of more than 12% for the most recent quarter, according to FactSet.

Optimism remains high enough that analysts have raised their estimates since the war began for S&P 500 profits over the first six months of the year, according to strategists at Morgan Stanley.

BlackRock gained 3%, and Citigroup rose 2.6% Tuesday after the financial companies reported stronger profit and revenue for the latest quarter than analysts expected.

JPMorgan Chase likewise delivered a better-than-expected quarter, but its stock dipped 0.8% as CEO Jamie Dimon said bank officials cannot predict how the “increasingly complex set of risks” will play out given so much uncertainty.

Amazon climbed 3.8% after saying it would buy Globalstar, a mobile satellite services company, for $90 per share in either cash or Amazon stock. Globalstar jumped 9.6%.

Software companies also rallied for a second day, recovering more of their sharp losses from earlier in the year on worries they could be made obsolete by artificial-intelligence technology. AppLovin rose 3.9%, and an ETF from iShares tracking the software industry added 1%.

That in turn helped private-credit companies recover. These companies have lent money to software businesses and others that may be under threat from AI, and some have seen a rush of investors trying to pull out their money.

Blue Owl Capital rose 8.5% to trim its loss for the year so far below 39%. Ares Management climbed 5.6%, and Apollo Global Management rose 4.4%.

They helped offset a 5.7% drop for Wells Fargo, which reported weaker revenue for the latest quarter than analysts expected.

All told, the S&P 500 rose 81.14 points to 6,967.38. The Dow Jones Industrial Average gained 317.74 to 48,535.99, and the Nasdaq composite climbed 455.35 to 23,639.08.

In stock markets abroad, indexes rose across much of Europe and Asia. South Korea’s Kospi jumped 2.7%, and Japan’s Nikkei 225 rose 2.4% for two of the bigger gains.

In the bond market, Treasury yields eased as the fall for oil prices took some of the pressure off inflation. The yield on the 10-year Treasury fell to 4.25% from 4.30% late Monday.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

A person walks in front of an electronic stock board showing New York Dow, Japan's Nikkei, and Topix indexes at a securities firm Tuesday, April 14, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, April 14, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, April 14, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, April 14, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, April 14, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

SEOUL, South Korea (AP) — North Korea launched two short-range ballistic missiles toward the sea on Sunday, South Korea's military said, days after the North threatened to bolster its nuclear deterrent capabilities and respond to what it called U.S. hostilities.

The launches were the latest in a series of weapons demonstrations by North Korea even after U.S. President Donald Trump scaled back a joint military exercise with South Korea last month in an apparent effort to revive diplomacy with the North's leader, Kim Jong Un.

The two missile launches — about three hours apart — were conducted from North Korea's eastern coastal Wonsan area. The first missile flew about 450 kilometers (280 miles) while the second one flew more than 600 kilometers (370 miles), both toward the North’s eastern waters, South Korea's military said.

The missiles eventually ended up in the sea. South Korea’s presidential office urged North Korea to immediately halt ballistic missile launches that are banned by U.N. Security Council resolutions. The South's military said it maintains readiness to repel any provocations by the North under a solid alliance with the United States.

Japan's Defense Ministry said it detected a suspected North Korean missile earlier Sunday but that the weapon did not land in its territorial waters.

Kim's sister and senior official, Kim Yo Jong, earlier shrugged off Trump’s overture, saying that shortening the drill wouldn’t change its “provocative, aggressive nature.” North Korea’s military later launched about 10 short-range ballistic missiles toward the sea, apparently following through with a previous threat to respond to the U.S.-South Korean drill.

On Friday, Kim's sister slammed another recent U.S.-led multilateral maritime exercise in the region as a “frantic military move” by the Americans meant to prolong their hegemony in the Asia-Pacific area. The “Pacific Vanguard” exercise brought together the U.S., South Korea, Japan, Australia, New Zealand and Canada.

She claimed that “regular U.S.-led war rehearsals” are the main source of worsening tensions in the Korean Peninsula and the region.

“Our will to defend our sovereignty will be expressed in clearer action and there will be never ever change in the course of intensifying the nuclear war deterrence,” she said.

Earlier this month, North Korea conducted what it called a joint live-fire drill involving missiles, artillery and drones, a day after the United States, South Korea and Japan wrapped their five-day trilateral military drill that North Korea described as a provocation. North Korea said its drill included firing different types of weapons simultaneously, likely aiming at developing the ability to overwhelm South Korean and U.S. air defenses.

Kim Jong Un has been focusing on expanding his nuclear arsenal after his earlier high-stakes diplomacy with Trump collapsed in 2019.

When Trump ordered the Pentagon to “substantially reduce” the annual Ulchi Freedom Shield exercise with South Korea, he cited what he called a good relationship with Kim, who has called such drills invasion rehearsals.

Emboldened by his advancing nuclear arsenal and deepening ties with Russia and China, experts say Kim likely thinks he now has greater leverage in possible fresh diplomacy with Trump. Earlier this year, Kim said he could return to talks if the U.S. drops its “hostile policy” against his country and respects what he calls the North’s status as a nuclear state.

South Korean President Lee Jae Myung, a liberal who advocates improved ties with the North, said on Friday that a resumption of U.S.-North Korea talks would be “an important starting point” toward boosting chances for peace on the Korean Peninsula.

“What is clear is that President Trump wants dialogue and I’ve also been encouraging President Trump to seek dialogue” with Kim, Lee told reporters.

Associated Press writer Yuri Kageyama in Tokyo contributed to this report.

A TV screen shows a file image of a North Korean missile launch during a news program at Seoul Railway Station in Seoul, South Korea, Sunday, Sept. 20, 2026. (AP Photo/Ahn Young-joon)

A TV screen shows a file image of a North Korean missile launch during a news program at Seoul Railway Station in Seoul, South Korea, Sunday, Sept. 20, 2026. (AP Photo/Ahn Young-joon)