Global markets stabilize, oil retreats amid US-Iran conflict uncertainty

By: Stan Choe, Associated Press

NEW YORK (AP) — Stocks rose and oil prices eased on Thursday as financial markets calmed amid uncertainty over the next steps following President Donald Trump's remarks casting doubt on the temporary truce in the war with Iran.

Market Performance

• S&P 500: Climbed 0.8%, fully recovering its loss from the previous day
• Dow Jones Industrial Average: Added 139 points, or 0.3%
• Nasdaq Composite: Rallied 1.3%

The gains came despite the United States launching new airstrikes against Iran, which responded by targeting U.S. allies in the Middle East.

Oil Prices Retreat

Brent crude, the international benchmark, fell 2.2% to $76.30 per barrel, giving back much of the previous day's surge. This compares to $78.02 on Wednesday and $71.80 at the end of last week.

The market remains concerned that a return to full-scale war could block oil tankers from transiting the Strait of Hormuz, preventing crude deliveries from the Persian Gulf to global customers. Such a disruption could:

• Worsen inflation, which economists had expected to ease alongside lower oil prices
• Force the Federal Reserve and other central banks to raise interest rates

While higher rates can help contain inflation, they also slow economic growth and depress asset prices.

Trump's Remarks Add Uncertainty

President Trump stated on Wednesday that the latest back-and-forth fighting would not result in "long-term" military action, leaving markets uncertain about the trajectory of the conflict.

Impact on Gasoline Prices

The volatility in oil prices halted a steady decline in gasoline costs. According to motor club AAA:

• The average price for a gallon of regular gasoline rose 5 cents overnight
• Thursday's average: $3.85 per gallon
• Up 68 cents from a year earlier

AI and Semiconductor Stocks Provide Support

Renewed strength in computer chip makers and other beneficiaries of the artificial-intelligence boom helped support global stock markets.

South Korea

The Kospi index rose 0.6%, recovering from a 5.3% plunge the previous day. SK Hynix, which is preparing to sell shares trading in the United States, jumped 5.3% in Seoul.

Wall Street

Micron Technology climbed 4.5%, one of the strongest forces lifting the S&P 500. The company cited "surging demand for memory in the AI era" while providing a progress update on construction in central New York of what it describes as the largest semiconductor manufacturing site in U.S. history.

These stocks have become some of Wall Street's most influential after growing significantly amid AI euphoria. However, they have also faced recent pressure due to concerns that prices may have risen too high and that AI may not generate sufficient productivity and profits to justify the massive investments in chips and data centers.

This article was originally published by the Associated Press.