US equity indexes advanced on Tuesday as optimism that Iran peace talks may resume this week pushed crude oil futures sharply lower, and after mega-cap banks reported quarterly earnings.
The Nasdaq Composite jumped 2% to 23,639.08, the S&P 500 climbed 1.2% to 6,967.38, and the Dow Jones Industrial Average advanced 0.7% to 48,535.99. S&P 500 has reportedly clawed back all of its post-Iran-war declines and, according to CNBC-compiled data, the index is close to its all-time high of about 7,002.3.
Consumer discretionary, communication services, and technology led the gainers. Energy was by far the worst performer among a trio of decliners.
Talks to end the Iran war could resume in Pakistan over the next two days, US President Donald Trump said on Tuesday, after the collapse of weekend negotiations prompted Washington to impose a blockade on Iranian ports, Reuters reported.
Gulf, Pakistani, and Iranian officials said the US and Iran's negotiating teams could return to Pakistan later this week, according to the news report. Still, one senior Iranian source said no date had been set, the report added.
The CBOE Volatility Index dropped 4% to 18.36.
European countries are putting together a plan for a broad coalition of countries to help free up shipping through the Strait of Hormuz, including sending mine-clearing and other military vessels, The Wall Street Journal reported, adding that the plan would only come to pass after the war.
Meanwhile, after the first direct talks in decades, Israel and Lebanon agreed to hold further negotiations "at a mutually agreed time and venue," CNN cited the US State Department as saying.
West Texas Intermediate crude oil futures sank 6.8% to $92.32, and Brent crude futures slumped 4.3% to $95.13.
In precious metals, gold futures jumped 2% to $4,864.70 and silver futures soared 5.3% to $79.70.
In company news, Citigroup (C) and BlackRock (BLK) reported Q1 earnings and revenue growth above market expectations. JPMorgan Chase (JPM) also delivered a better-than-expected quarter.
United Airlines (UAL) Chief Executive Scott Kirby proposed a potential combination with American Airlines (AAL) during a late February meeting with President Donald Trump, Reuters reported Monday, citing two unnamed sources familiar with the matter.
In economic news, the US Producer Price Index rose by 0.5% in March, the same as in February and below the 1.1% gain expected in a Bloomberg-compiled survey. Energy prices jumped by 8.5% in the month after a 2.1% gain in the previous month due to a 15.7% surge in gasoline prices. Excluding food and energy, core PPI edged up 0.1%, below the 0.4% gain forecast and slower than the 0.3% gain reported in February.
Most US Treasury yields fell, with the 10-year down 4.9 basis points to 4.25% and the two-year retreating 3.6 basis points to 3.75%.
The International Monetary Fund now expects 2.3% US economic growth in 2026, a downward adjustment from its 2.4% estimate set out in January and compared with the 2.1% growth reported in 2025. The IMF also revised down its 2026 global growth outlook in its World Economic Outlook update released Tuesday.