Stock Market Indexes Rally Wednesday as Iran Talks and SpaceX IPO Lift Sentiment

All three major indexes are up today. The Nasdaq Composite (NASDAQINDEX: ^IXIC) leads the way around 1:22 p.m. ET with a 1.1% gain. The Dow Jones Industrial Average (DJINDICES: ^DJI) followed at a 0.96% gain, while the S&P 500 (SNPINDEX: ^GSPC) rose by 0.76%.

^DJI data by YCharts

The session featured two distinct vertical spikes around 10:15 a.m. ET and 11:15 a.m. ET. A mild midday dip reversed quickly, leaving all three indexes hovering near their daily highs into the afternoon.

Why the market woke up happy

Two stories did the heavy lifting on Wednesday.

First, oil prices dropped sharply. President Trump said Iran negotiations are in their "final stages," and crude fell below $100 per barrel again. After all the Strait of Hormuz anxiety, that's a big deal. The United States Oil Fund (NYSEMKT: USO) fell 6.6%, which sounds bad until you remember that lower oil prices are good news for almost everyone except oil companies.

Second, IPO fever returned. Goldman Sachs (NYSE: GS) surged nearly 5% after reports confirmed it secured the lead underwriter role on SpaceX's upcoming IPO. The offering could raise up to $75 billion at a total valuation approaching $2 trillion, potentially making it the largest IPO in history. As the heaviest-weighted stock on the Dow, Goldman's jump made a significant difference to that index today.

Chip stocks joined the party. Nvidia (NASDAQ: NVDA) climbed about 2% ahead of tonight's earnings report, adding roughly $100 billion in market cap. AMD (NASDAQ: AMD) jumped 7.4% after failed labor negotiations at Samsung raised concerns about memory supply disruptions. Less supply plus steady demand equals higher chip prices. AMD shareholders aren't complaining.

Don't get too comfortable

If Tuesday reminded you that markets can sell off fast on bad vibes, Wednesday highlights that they can bounce just as quickly when the headlines improve. Volatility is a double-edged blade.

The Iran news matters if it holds. Lower oil prices cool inflation fears, ease pressure on the Fed, and take some geopolitical anxiety off the table. But "final stages" isn't the same as "done deal," and these talks have collapsed several times before. Fingers crossed, but you shouldn't hold your breath waiting for a firm peace agreement.

Image source: Getty Images.

For long-term investors, the lesson is the same as yesterday, just with a green sign instead of a red one. Today's jumps essentially canceled out yesterday's dips. The noise is loud, and the signal is quieter. Stay patient, stay cool, and don't let any of these moves distract you from quality companies and undervalued stocks.

Anders Bylund has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Goldman Sachs Group, and Nvidia. The Motley Fool has a disclosure policy.