Gold falls as traders weigh U.S.-Iran talk progress

Stocks experienced a decline on Wednesday while oil prices increased as investors assessed the prospects of an agreement to end the conflict in the Middle East, following reports that US President Donald Trump had "very good" discussions with Iranian representatives at the United Nations. Trump also commented that a productive three-hour meeting the previous day had led to plans for another meeting in the near future.

The market's initial reaction to the potential for a deal was to lower oil prices, as hopes had been high that the Strait of Hormuz would see a return to normal oil and gas flow. However, once the anticipated developments failed to materialize, Brent North crude, the global benchmark, surged nearly 2 percent above $100 per barrel.

Wall Street stocks opened lower after the Nasdaq hit a record high earlier in the week, driven by enthusiasm for artificial intelligence (AI). Most European and Asian indices also experienced a pullback. Stephen Innes at Quintex Intel noted that the UN meeting's presence shifted the market's focus from pure escalation pricing to a genuine diplomatic process, despite the fact that a final agreement still seemed distant.

The Organisation for Economic Co-operation and Development (OECD) reported that global economic growth had been "resilient" in numerous countries, even in the midst of the war. The organization subsequently adjusted its economic output forecasts for 2026.

Oil prices had initially dropped following an announcement that Saudi Arabia had restarted operations along its East-West Pipeline, a critical oil export route that had been shut down due to drone attacks. The kingdom aimed to resume exports later in the week. Saudi oil giant Aramco reportedly informed Asian refiners that they could soon pick up crude from the Red Sea port of Yanbu, but the company told European counterparts that they would not receive oil in October, according to Bloomberg.

In Asian trading, Hong Kong's Hang Seng index declined by one percent, despite announcements from Alibaba, the Chinese tech giant, regarding the expansion of its overseas data centers in Europe and the Middle East. Shanghai's stock exchange lost 0.4 percent. Alibaba's expansion followed a surge in confidence in AI, with both Anthropic and OpenAI releasing new, more affordable AI models within hours of each other.

Anthropic's release coincided with its anticipated stock market debut, while OpenAI has postponed its IPO plans until the following year. South Korea's tech-driven Kospi and Taiwan's Taiex index -- home to chipmaker TSMC -- both rose by nearly one percent.