Wall Street advances on Iran deal hopes, SpaceX and AMD dip

US stock markets traded higher on Wednesday as optimism over a potential Middle East peace agreement that could reopen the Strait of Hormuz outweighed weakness in shares of SpaceX and AMD.

As of 10:45 a.m. Eastern Time, the S&P 500 climbed 0.4%, the Dow Jones Industrial Average added 1.1%, and the Nasdaq Composite rose 0.1%.

At the open, the Dow Jones Industrial Average rose 180.2 points, or 0.33%, to 54,266.12. The S&P 500 rose 35.1 points, or 0.45%, to 7,771.62​, while the Nasdaq Composite rose 113.0 points, or 0.43%, to 26,698.018.

The gains followed another strong session on Tuesday, when both the S&P 500 and the Dow Jones Industrial Average closed at fresh record highs, while the Nasdaq remained less than 2% below its all-time peak.

Investor sentiment remained focused on developments surrounding the US-Iran conflict. US President Donald Trump said a deal to reopen the Strait of Hormuz could be reached as early as Wednesday, raising hopes of easing geopolitical tensions and improving global oil supplies.

Reflecting that optimism, Brent crude, the global oil benchmark, slipped 0.70% to $78.81 a barrel.

On the economic front, data showed that US private employers added 44,000 jobs in July, according to payroll processor ADP, well below economists' expectations. The report is being closely watched as investors look ahead to the government's official non-farm payrolls data due on Friday for further clues on the health of the labour market.

In the bond market, Treasury yields were little changed. The benchmark 10-year Treasury yield edged up to 4.64% from 4.63% in the previous session.

Key Stock Movers

Shares of Walt Disney climbed 3.2% after the entertainment giant exceeded Wall Street's profit expectations, supported by a $1 billion global box office performance for Toy Story 5 and solid revenue growth from its theme park business.

Booking Holdings surged 5.5% after the online travel company posted better-than-expected quarterly profit and revenue, driven by resilient global travel demand.

SpaceX shares tumbled 12.5% even though Elon Musk's company reported a smaller quarterly loss than analysts had forecast in its first earnings release as a publicly traded company.

However, SpaceX provided a lift to chipmaker Nvidia, whose shares gained 3.9% after the aerospace company announced it would exclusively use Nvidia's processors to power its artificial intelligence infrastructure.

Advanced Micro Devices (AMD) stock slid 7.2% after the company gave an underwhelming sales outlook.

Bullion

Gold prices rallied sharply on Wednesday, driven higher by a weakening US dollar and a pullback in Treasury yields, as investors kept a close eye on geopolitical shifts in the Middle East.

By 09:44 a.m EDT (1344 GMT), spot gold climbed 3% to $4,199.78 per ounce. USgold futures rose 2.6% to $4,260.80.

The US dollar was near its lowest against the Japanese currency in three months.

Among other metals, spot silver rose 4.2% to $62.05 per ounce, platinum gained 0.5% to $1,725.58, and palladium climbed 0.5% to $1,359.80.