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story.lead_photo.caption FILE - In this Jan. 3, 2020, file photo visitors to the New York Stock Exchange pause to take photos in New York. The U.S. stock market opens at 9:30 a.m. EST on Wednesday, Jan. 8. (AP Photo/Mary Altaffer, File)

NEW YORK (AP) — Markets unclenched Wednesday, and U.S. stocks neared records on hopes the United States and Iran are backing away from the edge of war.

The rally capped a whirlwind day of reversals that swept through markets around the world. Stocks initially reeled after Iran fired missiles at two bases in Iraq housing U.S. troops, retaliation for a U.S. drone strike that killed a top Iranian general last week.

Gold soared overnight as investors scrambled for safety, crude jumped on fears a war would squeeze oil supplies and the futures market suggested U.S. stocks would drop sharply as soon as trading opened in New York. However, the selling abated as reports suggested no Americans died and after Iran’s foreign minister said his country had concluded “proportionate measures in self-defense.”

When trading opened, the S&P 500 climbed modestly higher, and it more than tripled its gain after President Donald Trump confirmed no Americans were hurt and that Iran “appears to be standing down.”

Trump said he’d add economic sanctions on Iran, but he also said the United States is “ready to embrace peace with all who seek it.” That fit with the market’s hopes that no further military escalations may be on the way, at least for now.

Not only did stocks climb, crude oil ended up slumping sharply and gold fell for the first time in 11 days. Treasury yields rose in a sign of optimism, and a measure of fear in the stock market eased.

The S&P 500 rose 15.87 points, or 0.5 percent, to 3,253.05. It had been up as much as 0.9 percent earlier in the day and was on track to set a record, but the gains moderated in the last half hour of trading.

The Dow Jones Industrial Average rose 161.41, or 0.6 percent, to 28,745.09. The Nasdaq composite set a record after rising 60.66, or 0.7 percent, to 9,129.24.

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