Oil Surge and Fed Signals Rattle Bonds as U.S. Stocks Hold Steady

The S&P 500 finished virtually unchanged, losing less than 0.1%, a day after falling from all-time highs. The Dow Jones Industrial Average fell 280 points, or 0.6%, while the Nasdaq composite rose less than 0.1%.

The action was more dramatic in the oil market, where the price of a barrel of Brent crude oil for delivery in July rose 5.8% to settle at $110.44 per barrel. Most of the trading in the Brent market takes place here and it rose as high as $111.84 in the afternoon.

The highest price since the start of the war with Iran was reached last month at $119.50 in the most actively traded Brent contract. On Wednesday, the price of a barrel of Brent crude oil for delivery in June, which is traded less than the July contract, briefly breached that level, rising above $120.

Oil prices rose this week as President Donald Trump appeared willing to maintain a U.S. blockade of Iranian ships that prevents the country from making money selling oil. Iran is keeping the Strait of Hormuz closed to other oil tankers hoping to carry crude oil to customers around the world as long as the blockade continues.

High oil prices led the Fed to announce on Wednesday that it would continue to delay interest rate cuts. While low interest rates can stimulate the economy, they also run the risk of worsening inflation.

Three Fed officials said they did not want to include anything in the central bank’s statement announcing the decision that suggested further cuts could come.

Treasury yields rose in the bond market immediately afterwards, adding to gains made earlier in the day due to rising oil prices. The yield on the 10-year Treasury note rose to 4.41% from 4.36% late Tuesday.

The two-year Treasury yield, which more closely tracks expectations for Fed action, rose further. It jumped from 3.84% to 3.93%, a notable move for the bond market.

Traders still largely expect the Fed to keep the federal funds rate steady through the end of this year, according to data from CME Group. But they eliminated almost all bets on a rate cut in 2026 in favor of the chance of a small increase.

Still, the U.S. stock market remained near records as more companies reported stronger profit growth at the start of 2026 than analysts expected.

Visa rose 8.3% after delivering stronger results than analysts expected, and CEO Ryan McInerney said consumer spending remained resilient in the quarter.

Starbucks also gained 8.4% after reporting better-than-expected results and saying customers were spending more with each visit, especially at its North American stores.

However, those who failed to meet expectations were punished. GE Healthcare Technologies fell 13.2% after falling short of analysts’ estimates. Robinhood Markets tumbled 13.2% after reporting profit growth wasn’t as strong as analysts expected.

Booking Holdings swung between a loss and a gain, closing with a 0.3% gain after the online travel company reported better results than analysts expected. It said the war with Iran affected its results and prevented some potential customers from booking rooms during the quarter.

The company behind Booking.com, Priceline and other brands said it expected the dispute to continue affecting its business until the end of June. This could affect travel not only in the Middle East but also in key transit corridors between Europe and Asia.

Overall, the S&P 500 fell 2.85 points to 7,135.95. The Dow Jones Industrial Average fell 280.12 to 48,861.81, while the Nasdaq composite rose 9.44 to 24,673.24.

Indices in foreign stock markets fell in Europe after the strong closing in Asia. Hong Kong’s Hang Seng rose 1.7%, one of the strongest moves in the world, while London’s FTSE 100 fell 1.2%.