Oil prices tumble, stocks rally on Mideast peace hopes

Washington believes it is close to reaching an agreement with Iran to reopen the key Strait of Hormuz and end the conflict, US news outlet Axios reported, citing two US officials.

International oil benchmark Brent North Sea made a double-digit plunge to under $100 a barrel, before climbing back above that level after US President Donald Trump threatened to restart bombing Iran

The main US contract, West Texas Intermediate, dived more than 12 percent to under $90 a barrel before paring losses.

European equities got a boost, with the Paris exchange piling on gains of nearly three percent and both Frankfurt and London ending the day up more than two percent.

"The (Axios) news has ignited fresh optimism that we're moving in the right direction for global energy markets, which is supporting a broad risk-on move" into equities, noted Saxo UK investor strategist Neil Wilson.

"Bond yields slipped along with the US dollar as risk sentiment picked up with a swifter end to the conflict vital to addressing the market's inflation risk."

According to Axios, the two sides are close to agreeing on a "one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations".

It said the deal would involve Iran committing to a moratorium on nuclear enrichment and the United States agreeing to release billions of dollars of frozen Iranian funds.

Washington is reportedly awaiting a response from Tehran on several key points in the next 48 hours.

"We have been promised peace deals before, which have then failed to materialize, so while the market is willing to trade on the back of this deescalation, it will take further concrete steps to end the war and reopen the Strait of Hormuz before the oil price can meaningfully fall below $100 per barrel for Brent crude," said Kathleen Brooks, research director at trading platform XTB.

Wall Street's stock indices shot higher as well, with sentiment also buoyed by better-than-expected corporate earnings.

Shares in chip-maker AMD jumped 17 percent higher after it posted strong first-quarter figures as well as a rosy outlook, helping other tech stocks.

Both the tech-heavy Nasdaq Composite and S&P 500 set new all-time highs.

"AI growth enthusiasm is in full swing following AMD's earnings report and other developments," said Briefing.com analyst Patrick O'Hare.

Shares in Disney jumped seven percent after the entertainment giant's revenue and earnings outstripped analyst expectations.

Elsewhere on Wednesday, Seoul's Kospi stocks index piled on more than five percent to pass 7,000 points for the first time.

That came on the back of an eye-watering surge by Samsung, which rocketed 14.4 percent to hit a market capitalisation above $1 trillion thanks to huge demand for its AI chips.

Samsung is only the second Asian firm after Taiwan's TSMC to reach the figure. Samsung's shares have risen around 300 percent over the past year as the artificial intelligence boom boosts South Korean growth.

The yen surged against the dollar on what is thought to have been an intervention by Japanese authorities to support the struggling currency.