Brent crude rallied back to $97.81 after the United States and Iran said they launched retaliations linked to threats to the U.S.-Iran ceasefire, helping push oil prices closer to $100. At the same time, U.S. stocks pulled back from records: the S&P 500 fell 0
Oil prices climbed back toward the $100 level as new fighting-related flare-ups rattled expectations for the U.S.-Iran ceasefire—and Wall Street took notice.
Brent crude, the international benchmark, rose 1.9% to $97.81. The move followed statements from both the United States and Iran that they launched retaliations for earlier attacks or attempted ones. Traders had been watching for any sign that tensions might reopen the Strait of Hormuz to oil tankers. a scenario that would improve the flow of crude and potentially ease prices.
While oil firmed, U.S. equities eased away from fresh highs. The S&P 500 fell 0.5% from its all-time high. The Dow Jones Industrial Average was down 466 points, or 0.9%, with an hour remaining in trading, and the Nasdaq composite was 0.8% lower.
Investors also faced pressure from higher bond yields, which rose as oil prices climbed. The yield on the 10-year Treasury rose to 4.49% from 4.46% late Tuesday and from 3.97% before the war began.
Higher yields are now feeding into worries about slower economies and lower returns across asset classes. The average long-term U.S. mortgage rate has already reached its most expensive level in nine months. and higher borrowing costs could curb corporate borrowing—particularly for companies looking to build the artificial-intelligence data centers that have supported parts of U.S. growth recently. Smaller firms can be hit hardest when credit turns more expensive. The Russell 2000 index of the smallest U.S. stocks fell 1.3%, more than the rest of the market.
The day’s company earnings gave investors familiar bright spots, but not enough to stop the broader pullback. Palo Alto Networks slid 5.8% even though it reported profit for the latest quarter that topped analysts’ expectations. The stock had opened the day up 61.3% for the year so far, exceeding the S&P 500’s already large 11.2% rise.
Macy’s fell 0.9% after moving between gains and losses earlier. The retailer reported profit for the latest quarter that blew past analysts’ forecasts, saying an overhaul of its merchandise and better customer service is resonating with customers.
A mixed batch of U.S. economic reports landed between the hopes of a resilient economy and the reality of rising costs. The Institute for Supply Management said growth for U.S. construction. agricultural and other services businesses accelerated by more last month than economists expected. a step that can be read as supportive for the economy. But the survey also showed businesses feeling the pinch of higher prices tied to tariffs and more expensive oil. One company in the accommodation and food services industry told the survey: “This is the definition of inflationary pressure starting to affect us.”.
Even so, stocks were still trading near records despite the pressure building across the global economy from higher inflation. Oil prices remain below their peaks from earlier in the fighting. and hope has stayed alive on Wall Street that the United States and Iran will ultimately agree to reopen the Strait of Hormuz to oil tankers. That expectation, combined with strong profit reports from U.S. companies. had carried the market through a nine-day winning streak—up to Wednesday—reaching the edge of its longest such run in three decades.
Several individual results underscored that tension between resilience and rising costs. Medtronic climbed 5.7% after reporting stronger profit for the latest quarter than analysts expected and increasing its dividend payout going to investors. GameStop jumped 6.7% after saying its revenue in the latest quarter grew 14% from a year earlier. and after announcing a program to send up to $2 billion to its investors through share buybacks.
Globally, European indexes fell following a mixed finish in Asia. Hong Kong’s Hang Seng dropped 1.6%, while Japan’s Nikkei 225 jumped 2.5% to another record.
Behind the day’s dips and gains, the AI-led momentum still powered parts of the market. On Wall Street. Marvell Technology rose another 4.4% after its best day on record. a surge of 32.5%. following remarks from Nvidia CEO Jensen Huang at a conference in Taiwan suggesting Marvell could be “the next trillion-dollar company.” Micron Technology also continued riding the AI wave.
For investors. the takeaway was immediate: oil moving toward $100 can tighten financial conditions quickly. especially when markets are already on edge over yields. inflation pressure. and what comes next for U.S.-Iran tensions. The hope of easing through a reopened Strait of Hormuz remains. but Wednesday’s price action made the stakes feel closer to the surface.
oil prices Brent crude $100 oil U.S.-Iran ceasefire Strait of Hormuz S&P 500 Dow Jones Nasdaq Treasury yields 10-year Treasury inflationary pressure mortgage rates Russell 2000 earnings Palo Alto Networks Macy’s Medtronic GameStop AI stocks Marvell Micron