Wall Street heads toward a record 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.