(Updates after report of potential peace memo)

* Stocks jump after report that US is close to memo to

end war

* Stoxx 600 up 2.1%; S&P futures rise 0.7%; oil down 7%

* AI exuberance also driving gains in stocks

By Harry Robertson

LONDON, May 6 (Reuters) - Stocks leapt and oil prices

dropped on Wednesday after a report said the White House

believed it was closing in on a memorandum to end the war with

Iran, while momentum in AI-driven trades accelerated.

The report by news outlet Axios said the U.S. expected Iranian

responses on several key points in the next 48 hours. A

Pakistani source involved in the peace efforts confirmed the

report to Reuters on Wednesday.

Brent crude, the global benchmark, dropped 7.5% to

$101.70 per barrel.

The Iran war has all but closed the Strait of Hormuz,

through which 20% of global energy normally flows, so a peace

deal could alleviate some of the pain for oil and gas markets.

Europe's STOXX 600 index extended its gains and was

last up 2.1% after climbing 0.7% a day earlier. MSCI's

All-Country World Index climbed 0.9% to a fresh

record.

Futures for the U.S. S&P 500 rose 0.7%, a day after the

index rallied 0.8% to hit its latest record high, driven

by strong company earnings and excitement about artificial

intelligence.

"It seems equity investors are still looking to put money to

work and are jumping on positive-sounding news from the Gulf,"

said Chris Turner, head of global markets at ING, responding to

an earlier rise in shares after U.S. President Donald Trump

touted progress in peace talks.

The U.S. dollar, which has been a safe haven during

the Iran war, dropped 0.5% against its major peers, reflecting

investor hopes about a possible deal.

Meanwhile, yields on government bonds fell along with oil

prices as traders dialled down their bets on central bank rate

hikes.

The 10-year U.S. Treasury yield fell 7 basis points to

4.35%.

The broadest index of Asia-Pacific shares outside Japan

jumped 3.2%. The surge was led by a 6.5% charge

for South Korea's KOSPI, which reopened after a

holiday.

Samsung Electronics ( SSNLF ) jumped 14%, topping a $1

trillion market value and overtaking Berkshire Hathaway ( BRK/A )

.

"Due to the capex spend we are seeing from (AI) hyperscalers

in the U.S., the earnings growth trajectory for sectors such as

semiconductors, tech hardware, industrials and materials in Asia

exceeds anything I have seen in a long time," said Rushil

Khanna, head of equity investments for Asia at Ostrum, an

affiliate of Natixis Investment Managers.