By STAN CHOE AP Business Writer
NEW YORK (AP) — The U.S. stock market is holding steadier Tuesday as Wall Street waits for the next signal on when the war with Iran may end.
The S&P 500 added 0.3%, a day after its latest wild swings caused by extreme moves in the oil market. The Dow Jones Industrial Average was up 210 points, or 0.4%, as of 12:30 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.
Oil prices, meanwhile, were near where they were late Monday. Spikes there have been rocking financial markets worldwide because of worries that the war could block the global flow of oil and natural gas for a long time.
The price for a barrel of Brent crude, the international standard, was sitting at $89.42. That’s down 9.6% from its settlement price the day before, but much of that decline happened before the U.S. stock market finished trading on Monday. That’s why the drop did not give much of a boost to U.S. stocks Tuesday.
A barrel of benchmark U.S. crude was also sitting close to where it was late Monday, at $84.64.
Oil prices plunged Monday afternoon from a high of nearly $120 per barrel, its most expensive level since 2022, after President Donald Trump told CBS News he thinks “the war is very complete, pretty much.” That raised hopes that the war may end sooner than later, which could allow oil to flow freely again from the Middle East to customers around the world.
But Trump’s comments later Monday, after the U.S. stock market finished trading, were not as clear. And a spokesperson for Iran’s paramilitary Revolutionary Guard said that “Iran will determine when the war ends.” Iran launched new attacks Tuesday at Israel and Gulf Arab countries, keeping pressure on the Middle East in a war started by Israel and the United States.
That has Wall Street waiting for the next clue about how long the war may last.
One point where Trump remained clear was his desire to keep the Strait of Hormuz open. The war has effectively blocked much of the waterway off Iran’s coast, where a fifth of the world’s oil sails on a typical day. That’s been a central reason for oil prices’ extreme swings recently, which have dominated other financial markets and raised worries about the global economy.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” Trump said in a posting on his social media network late Monday.
“The outlook for oil right now is about as binary as it gets,” according to Hakan Kaya, senior portfolio manager at Neuberger Berman.
“Either the Strait of Hormuz reopens and you see a massive unwind of the risk premium, or it stays shut and we are looking at the largest supply disruption in modern history. There is no middle ground, and that is why putting a number on it is almost irresponsible.”
The International Energy Association said it will hold a meeting on Tuesday to discuss whether the 32 countries that are members should release some of their oil stockpiles to push downward on the price of oil.
The U.S. stock market has a history of bouncing back relatively quickly from past military conflicts, as long as oil prices don’t stay too high for too long. Uncertainty about whether that may happen this time around has led to stunning swings up and down for markets worldwide, often hour-to-hour.
If oil prices do stay high for long, household budgets already stretched by high inflation could break under the pressure. Companies would see their own bills jump for fuel and to stock items on their store shelves or in their data warehouses. It all raises the possibility of a worst-case scenario for the global economy, “stagflation,” where growth stagnates and inflation remains high.
On Wall Street, Vertex Pharmaceuticals leaped 8.5% for the biggest gain in the S&P 500 after reporting encouraging trends from a trial for its treatment for a life-threatening kind of kidney disease.
Stock markets in Asia and Europe jumped in their first chances to react to Trump’s comments from late Monday and the subsequent easing of oil prices. Indexes leaped 5.3% in South Korea, 2.2% in Hong Kong and 1.8% in France.
Tokyo’s Nikkei 225 rose 2.9% after the government also released revised economic data showing Japan’s economy grew faster in the final quarter of last year than initially estimated.
In the bond market, the yield on the 10-year Treasury edged down to 4.11% from 4.12% late Monday.
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AP Business Writers Yuri Kageyama and Matt Ott and AP Videographer Ayaka McGill contributed.