US Stocks Rebound After Strong Economic Updates And An Easing Of Oil Prices
NEW YORK : The U.S. stock market rebounded Wednesday after two days of rough swings as oil prices stalled and reports gave encouraging updates on the economy.
The S&P 500 is up 1% and is on track to erase all its losses since the war with Iran began. The Dow Jones Industrial Average was up 319 points, or 0.7%, with an hour left in trading, and the Nasdaq composite was 1.5% higher.
The force is off to a frightening start to Wednesday, when South Korea’s Kospi stock index fell 12.1%, its worst loss in history. Uncertainty about the war has caused prices to fluctuate hour by hour in financial markets this week; Many people take their cues from the direction of oil prices.
Oil prices moderated as trade shifted westward, from Asia to Europe and the Atlantic. The barrel price of Brent crude oil, the international standard, briefly exceeded $84 per barrel, then settled at $81.40 and returned to the level of the day before. Benchmark US crude oil rose 0.1% to $74.66 a barrel.
Stocks also received support from signs that the U.S. economy is strengthening.
Growth of U.S. businesses in real estate, finance and other service sectors rose last month at the fastest pace since summer 2022, a report said. Encouragingly from an inflation perspective, prices for such businesses were also increasing at a slower rate, at least before the war with Iran began.
A second report suggested that nongovernmental U.S. employers began hiring last month. This could be a hopeful signal for the U.S. government’s more comprehensive report on the overall labor market on Friday.
Concerns are intensifying in financial markets about how long the war with Iran will last, how much inflation will rise due to the high price of oil, and how much company profits will fall as a result.
The US stock market has a history of recovering relatively quickly from military conflicts in the Middle East, but this comes with a warning that oil prices will not rise too high. This suggests that some professional investors should be patient with fluctuations, at least when it comes to financial markets.
Not everyone is optimistic.
“I think the situation in Iran is out of control, and I think US President Donald Trump has made a huge miscalculation,” said Francis Lun, CEO of Venturesmart Asia. “The situation is very dire.”
Several companies on Wall Street helped drive Wednesday’s rally.
Stocks in the crypto industry rose as Bitcoin price rose to $74,000. Coinbase Global was up 15.3% and Robinhood Markets was up 8.3%.
Retailers and travel companies have rallied on hopes that a solid economy and easing increases in gas prices will mean their customers will be able to spend more.
Ross Stores rose 7% after reporting better profits and revenue than analysts expected in the latest quarter and saying it would enter 2026 with “solid momentum.” Expedia Group rose 3.1%.
Meanwhile, Big Tech stocks were the strongest force pushing the market up. Nvidia increased by 2% and Amazon increased by 4%. Because they are among the largest stocks in the U.S. market in terms of total value, their movements carry more weight in the S&P 500.
Indices in foreign stock markets also rose in Europe following the sharp declines in Asia. France’s CAC 40 index increased by 0.8% and Germany’s DAX index increased by 1.7%. This follows losses of 2 percent for Hong Kong’s Hang Seng and 3.6 percent for Japan’s Nikkei 225, as well as Seoul’s historic decline.
In the bond market, Treasury yields rose after surging earlier in the week on concerns that inflation would worsen. The yield on the 10-year Treasury note rose to 4.08% 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 even more difficult due to the increase in oil prices, which pushes already high inflation upwards.
The Fed may keep interest rates high to keep inflation under control. But higher interest rates will also make it more expensive for U.S. households and companies to borrow money, negatively affecting the economy.
The central bank had stated that it planned to continue interest rate cuts later this year in the hope of stimulating the employment market and the economy. Due to the war and high oil prices, traders postponed their predictions that the Fed might start cutting interest rates again until the summer months.
