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 their all-time high and crude oil prices eased as hopes climbed that the United States and Iran may try again on talks to end their war. The S&P 500 rose 1.2% Tuesday, bringing the index within 0.2% of its record set in January. The Dow gained 0.7%, and the Nasdaq composite climbed 2%. If talks succeed and the war ends up being only a temporary setback for the global economy, investors can turn their attention back to the rising profits for companies that had markets worldwide doing well before the fighting began.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — The U.S. stock market is rallying to the edge of its all-time high Tuesday, and oil prices are easing as hopes climb 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 1.1% to its leap from the day before, which had erased the last of its losses since the United States and Israel launched attacks on Iran in late February. It's just 0.2% below its record set in January and on track for its ninth gain in the last 10 days.

The Dow Jones Industrial Average was up 315 points, or 0.7%, as of 3:12 p.m. Eastern time, and the Nasdaq composite was 1.8% higher.

They followed gains for stock markets worldwide as Pakistan said it was trying to bring the United States and Iran together for more talks. Such prospects also helped lower the price of oil, whose production and transportation has been snarled by the fighting.

If talks succeed and the Iran war ends up being only a temporary setback for the global economy, rather than a new normal of very high oil prices and inflation, financial markets can turn their attention back to rising profits for companies and growth for economies. Those positives had stock markets worldwide largely doing well before the war began.

Brent crude oil, the international standard, has gone from roughly $70 per barrel before the war in late February to more than $119 at times when worries about the war hit their heights. Brent for June delivery fell 4.6% to $94.79 per barrel Tuesday.

A barrel of U.S. crude oil for May delivery dropped 7.9% to $91.28.

To be sure, hope has often quickly swung into doubt in financial markets since the war began, which has caused extreme and sudden reversals. 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.