The Dow Jones Industrial Average climbed to a record high on Wednesday, buoyed by growing market optimism that a diplomatic breakthrough is imminent between the United States and Iran.
The rally extended the powerful reversal seen on Tuesday, as investors embraced the prospect of reduced geopolitical risk in the Strait of Hormuz.
However, the index stalled later in the session as traders digested a wave of corporate earnings reports that offered a mixed picture of economic health.
The surge in equities reflects a broader repricing of shipping and energy risks.
With Iran and Oman recently agreeing on a shipping route through the Strait of Hormuz, markets are pricing in a potential de-escalation of tensions that have long threatened global energy flows.
This development has provided a tailwind for risk assets, reversing the caution that had characterized earlier trading sessions.