Wall Street traders sent stocks to all-time highs, bonds rose while a rally in oil waned amid speculation about a diplomatic breakthrough in the three-month war that has rattled markets around the world.

Equities rebounded on news reports the US and Iran have reached a tentative deal to extend a ceasefire by 60 days and launch further talks on Tehran’s nuclear program. The S&P 500 notched a six-day winning streak. Brent crude settled below $94 a barrel. Treasury yields dropped across the curve. The dollar fell against all developed-world currencies.

Hopes for a truce renewal overshadowed worries about recent clashes in the Persian Gulf that highlighted the challenge of forging a peace deal that would restore energy flows. The effective closure of the Strait of Hormuz since the start of the war has disrupted oil supplies, boosting fuel prices and inflation.

“Markets continue to get whipsawed by swings in Iran war sentiment,” said Elias Haddad at Brown Brothers Harriman & Co. “Regardless, risk-on sentiment should remain supported because both sides are still talking to work out a deal that would ultimately reopen the Strait of Hormuz.”

When pressed if an interim deal has been clinched, Treasury Secretary Scott Bessent would only say “the teams have been going back and forth.” He insisted President Donald Trump’s three “red lines” — reopening Hormuz, Iran turning over highly enriched uranium and ending its nuclear program — remain necessary for any pact.

Investors may be underestimating the chances of a “timely” reopening of Hormuz triggering a broad relief rally across financial markets, according to Citadel Securities’ Frank Flight.

Iran’s internet connectivity has recovered to roughly 86% of pre-conflict levels after a blackout, suggesting Tehran expects the conflict to wind down soon, he wrote, citing data from NetBlocks. Public appearances by senior military officials also indicate that Iranian leaders believe the risk of near-term escalation has diminished.

“Even if it is only a 60-day agreement to allow a resumption of traffic in the Strait, there should be a relief rally, as serious supply dislocations are approaching rapidly,” said veteran strategist Louis Navellier.

Higher energy costs have fueled price pressures, raising concerns the Federal Reserve would be forced to boost rates. US consumer spending edged up in April, with annual inflation accelerating to the highest since 2023. Meantime, the economy expanded in the first quarter at a 1.6% annualized pace, slower than previously estimated.

“The economy is still expanding, but hotter inflation limits the Fed’s flexibility and pushes rate cuts further out,” said Gina Bolvin at Bolvin Wealth Management Group. “This is a more difficult environment for investors because the growth story is cooling just as inflation is heating back up.”

Corporate Highlights:

•Anthropic PBC raised $65 billion in a funding round that valued the artificial intelligence company at $965 billion including the new investment, eclipsing rival OpenAI’s value for the first time.

•Dell Technologies Inc. gave an outlook for annual sales that far surpassed analysts’ estimates, fueled by demand for servers that power AI work.

•Snowflake Inc. soared on a stronger-than-expected outlook and a $6 billion multiyear agreement to use Amazon.com Inc.’s cloud services and chips.

•Retailers Kohl’s Corp., Best Buy Co. and Dollar Tree Inc. rallied on optimism that shoppers are still spending when they see what they want at the right price.

•Real estate mogul Tilman Fertitta’s years-long quest to buy Caesars Entertainment Inc. is finally paying off: His firm struck a $5.7 billion, all-cash deal for the Las Vegas company that will add some 52 casinos in the US to his entertainment empire.

•Union Pacific Corp. and Norfolk Southern Corp. sank after a key regulator paused its review of their planned $72 billion merger, potentially delaying what would be the biggest rail deal ever.

Some of the main moves in markets:

Stocks

•The S&P 500 rose 0.6% as of 4 p.m. New York time

•The Nasdaq 100 rose 0.8%

•The Dow Jones Industrial Average was little changed

•The MSCI World Index rose 0.4%

Currencies

•The Bloomberg Dollar Spot Index fell 0.2%

•The euro rose 0.2% to $1.1648

•The British pound rose 0.1% to $1.3442

•The Japanese yen rose 0.2% to 159.24 per dollar

Cryptocurrencies

•Bitcoin fell 2.5% to $73,240.71

•Ether fell 2.6% to $2,007.23

Bonds

•The yield on 10-year Treasuries declined three basis points to 4.45%

•Germany’s 10-year yield declined three basis points to 2.96%

•Britain’s 10-year yield declined four basis points to 4.81%

Commodities

•West Texas Intermediate crude rose 0.9% to $89.46 a barrel

•Spot gold rose 1% to $4,496.59 an ounce

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