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US Stocks Rebound; Oil Prices Stop Spik03/04 15:32
The U.S. stock market rebounded Wednesday from two days of punishing swings
after oil prices stopped spiking and reports gave encouraging updates on the
economy.
NEW YORK (AP) -- The U.S. stock market rebounded Wednesday from two days of
punishing swings after oil prices stopped spiking and reports gave encouraging
updates on the economy.
The S&P 500 rose 0.8% and made back most of its losses since the war with
Iran began. The Dow Jones Industrial Average climbed 238 points, or 0.5%, and
the Nasdaq composite climbed 1.3%.
The strength followed a scary start to Wednesday, when South Korea's Kospi
stock index plunged 12.1% for its worst loss in history. Uncertainty about the
war has sent prices in financial markets careening up and down this week, with
most taking their cues from what the price of oil is doing.
Oil prices moderated as trading moved westward from Asia to Europe and
across the Atlantic. After briefly topping $84 per barrel, the price for a
barrel of Brent crude, the international standard, settled at $81.40, back to
where it was a day earlier. A barrel of benchmark U.S. crude rose 0.1% to
$74.66.
Stocks also got a boost from signs of strength for the U.S. economy.
One report said growth for U.S. businesses in the real estate, finance and
other services industries accelerated last month at the fastest pace since the
summer of 2022. Encouragingly for inflation, it also said prices for such
businesses are increasing at a slower rate, at least before the war with Iran
began.
A second report suggested U.S. employers outside of the government picked up
their hiring last month. That could be a hopeful signal for the more
comprehensive report coming Friday from the U.S. government about the overall
job market.
In financial markets, worries are centered on how long the war with Iran
could last, how high inflation will go because of more expensive oil and how
much corporate profits will sink because of it.
The U.S. stock market has a history of shaking off military conflicts in the
Middle East relatively quickly, though that comes with the caveat that oil
prices don't jump too high. That has some professional investors suggesting
patience through the volatility, at least when it comes to financial markets.
Not everyone is optimistic.
"I think the Iran situation is getting out of hand, and I think that U.S.
President Donald Trump miscalculated enormously," said Francis Lun, CEO of
Venturesmart Asia. "The situation is very grim."
On Wall Street, a mix of companies helped drive Wednesday's rise.
Stocks enmeshed in the crypto industry climbed as bitcoin's price rebounded
back above $73,000. Coinbase Global jumped 14.6%, and Robinhood Markets rallied
8.1%.
Retailers and travel companies strengthened with hopes that a solid economy
and an easing for jumps in gasoline prices will mean their customers may have
more to spend.
Ross Stores climbed 8% after reporting better profit and revenue for the
latest quarter than analysts expected and saying it's entering 2026 with "solid
momentum." Expedia Group rose 3.1%.
Big Tech stocks, meanwhile, were the strongest forces lifting the market.
Amazon rose 3.9%, and Nvidia added 1.7%. Because they're among the biggest
stocks in the U.S. market in terms of total value, their movements carry more
weight on the S&P 500.
All told, the S&P 500 rose 52.87 points to 6,869.50. The Dow Jones
Industrial Average climbed 238.14 to 48,739.41, and the Nasdaq composite
rallied 290.79 to 22,807.48.
In stock markets abroad, indexes rose in Europe following sharp drops in
Asia. France's CAC 40 climbed 0.8%, and Germany's DAX returned 1.7%. That came
after losses of 2% for Hong Kong's Hang Seng and 3.6% for Japan's Nikkei 225,
along with Seoul's historic plunge.
In the bond market, Treasury yields ticked higher after jumping early in the
week with worries about worsening inflation. The yield on the 10-year Treasury
rose to 4.09% from 4.06% late Tuesday.
Wednesday's strong reports on the economy were welcome news for the Federal
Reserve, whose job it is to keep the U.S. job market healthy and inflation low.
The Fed's job has become more difficult because of the jump in oil prices,
which is pushing upward on already high inflation.
The Fed could keep interest rates high to keep a lid on inflation. But high
interest rates would also keep it more expensive for U.S. households and
companies to borrow money, grinding down on the economy.
The central bank had indicated it planned to resume its cuts to interest
rates later this year, in hopes of giving a boost to the job market and
economy. Because of the war and higher oil prices, traders have pushed their
forecasts further into the summer for when the Fed could begin cutting rates
again.
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