The United States and Iran moved closer Wednesday to a potential agreement to end their ongoing war, with Axios reporting that officials in both Washington and Tehran were drafting a one-page memorandum of understanding to halt hostilities and establish a framework for nuclear negotiations. Iran's Foreign Affairs Ministry confirmed a U.S. proposal was under review and said Tehran would convey its response to Pakistan, which is serving as mediator. An end to the conflict remains uncertain, however, with President Donald Trump cautioning on Truth Social that the war would end and the Strait of Hormuz would reopen only if Iran agreed to his terms, warning that renewed bombing would be "at a much higher level and intensity" if talks failed.

Financial markets responded sharply to reports of a potential deal. The S&P 500 closed up 1.5% and the Nasdaq Composite gained 2%, with both indexes reaching record highs, while the Dow Jones Industrial Average rose more than 610 points. U.S. crude oil fell as much as 15% during the session before moderating, closing down 7% at $95.08 per barrel, and international Brent crude closed down 7.8% at $101.27 per barrel. Despite Wednesday's declines, oil prices remain more than 65% higher than at the start of the year.

Iranian Foreign Minister Abbas Araghchi traveled to Beijing on Wednesday for talks with Chinese Foreign Minister Wang Yi, his first in-person visit to China since the war began on February 28. Araghchi said Iran seeks "a fair and comprehensive agreement" and reaffirmed bilateral ties with China, while Wang called for the Strait of Hormuz to reopen "as soon as possible" and urged that fighting cease without delay. The visit came one week before President Trump is scheduled to meet Chinese President Xi Jinping in Beijing on May 14 and 15, and analysts said Iran was seeking assurances that China would not make concessions to Washington that could undermine Tehran's position.

The Strait of Hormuz, through which approximately one-fifth of the world's oil and liquefied natural gas supplies pass, has been effectively closed since the war began, driving fuel and fertilizer prices sharply higher and raising fears of a broader global recession. U.S. Secretary of State Marco Rubio urged Beijing earlier Wednesday to press Iran to lift its blockade of the strait. Iran's navy signaled some flexibility, posting on X that "safe, stable passage" through the strait would be ensured under new protocols, though the full reopening of the waterway remains contingent on a broader agreement between the two countries.