Wall Street’s major indexes closed higher on Wednesday as oil prices fell after Iran reviewed a U.S. proposal to end the war in the Middle East, dashing investors’ hopes for a de-escalation in the fourth week of a war that has disrupted global energy flows and raised inflation worries.

The Dow Jones Industrial Average was up 304.51 points, or 0.66%, at 46,428.57, the S&P 500 was up 38.56 points, or 0.59%, at 6,594.90 and the Nasdaq Composite was up 169.0 points, or 177%, at 21,929.83.

While Iranian Foreign Minister Abbas Arakchi said top authorities were reviewing the proposals, he added that exchanging messages through mediation did not amount to negotiations and that Tehran had no intention of negotiating with the US.

Initially, Iran said it considered the US proposals made by Pakistan excessive and demanded sovereignty over the Strait of Hormuz.

The mixed messages led to erratic equity trading during the day, said Michael James, an equity sales trader at Rosenblatt Securities: “There’s sentiment and headlines driving a lot of market action.”

Any signs of communication between the countries made investors optimistic, following signs that Washington wants to restore a ceasefire and shipping through the crucial Strait of Hormuz, through which about 20% of global oil shipments pass.

“There is optimism that the proposal and counter-proposal are setting the stage for further negotiations,” said Gene Goldman, chief investment officer at Cetera Investment Management.

Until there is clarity on when the war might end, Goldman said he expects “volatility to remain elevated due to the impact of higher oil prices on inflation.”

During Wednesday’s session, energy (.SPNY), opens a new tab was the weakest of the S&P 500’s 11 major industry sectors. Strong leveragers include Content (.SPLRCM), Opens a New Tab, and Consumer Discretion (.SPLRCD), Opens a New Tab.

Shares of companies that rely heavily on the fuel rallied as oil prices settled down more than 2%. Cruise operators including Norwegian Cruise Line ( NCLH.N ) opened a new tab, with the S&P Composite 1500 Passenger Airlines Index (.SPCOMAIR) gaining quickly, with airlines underperforming the broader market.

The small-cap Russell 2000 Index (.RUT) opened a new tab at a two-week high during the trading session.

Arm’s US-listed shares rose sharply after the company unveiled a new AI data center chip that is expected to bring in billions of dollars in revenue. It was the top gainer in the Philadelphia Semiconductor Index (.SOX), Opens a New Tab. Other rallying chipmakers include Advanced Micro Devices ( AMD.O ), Opens a New Tab , and Intel ( INTC.O ), Opens a New Tab . Nvidia (NVDA.O), Opens a New Tab Shares also rose.

Destiny Tech100 ( DXYZ.N ) opens a new tab, rising after a report that SpaceX aims to file its IPO prospectus as soon as this week. SpaceX is the fund’s largest equity holding.

Other space companies have also emerged, including Rocket Lab ( RKLB.O ), opens a new tab, Intuitive Machines ( LUNR.O ), opens a new tab and EchoStar ( SATS.O ), opens a new tab .

Rising oil prices have reignited inflationary concerns, complicating central banks’ interest rate outlook. According to CME Group’s FedWatch tool, markets are not pricing in any easing from the Federal Reserve this year, compared to two cuts expected before the war broke out.

US-listed shares of JD.com and Alibaba rose, among other movers, after China’s state media and regulator urged the food-delivery platform industry to end a price war. Robinhood Markets ( HOOD.O ) opened a new tab rally after the trading platform announced a new $1.5 billion share buyback program.