Markets unclenched Wednesday, and U.S. stocks neared record highs on hopes that the United States and Iran were backing away from the edge of war.
The rally capped a whirlwind day of reversals that swept through markets around the world. Stocks initially reeled after Iran fired missiles at two bases in Iraq housing U.S. troops — retaliation for a U.S. drone strike that killed a top Iranian general last week.
Gold prices soared overnight as investors scrambled for safety; crude prices jumped on fears a war would squeeze oil supplies; and the futures market suggested U.S. stocks would drop sharply as soon as trading opened in New York. But the selling abated as reports suggested no Americans died and after Iran’s foreign minister said his country had concluded “proportionate measures in self-defense.”