The U.S. stock market traded with muted moves on Wednesday despite renewed strength in oil prices, a contrast to the sharper swings that have followed the war with Iran. The S&P 500 finished down 0.1% for a second straight session of relatively modest direction, with the Dow down 0.6% and the Nasdaq up 0.1% as investors weighed energy costs, inflation data and expectations for U.S. monetary policy.
Oil rose as attention stayed fixed on the Strait of Hormuz, the narrow waterway off Iran’s coast through which a fifth of the world’s oil passes on a typical day. With the war disrupting that traffic, crude storage tanks in the region have filled, a development that has led oil producers to say they were cutting output, according to the reporting.
Brent crude, the international benchmark, increased 4.8% to settle at $91.98 a barrel, while U.S. benchmark crude gained 4.6% to $87.25. The price moves followed a period in which oil had briefly spiked to its highest levels since 2022 earlier in the week, as investors reacted to concerns that Middle East production could be blocked for a long time.
The International Energy Agency said Wednesday that its member countries would release a record 400 million barrels from emergency stockpiles. The stated goal of that release, as described in the reporting, is to push down oil prices in the near term, though investors also said a full easing would likely depend on a return of sustained flows of oil and natural gas from the Persian Gulf.
Inflation risk remained part of the backdrop for markets. A report released Wednesday said U.S. consumers paid 2.4% higher prices in February than a year earlier, with groceries, gasoline and other costs of living included in the measurement. The report noted the rate matched the prior month but remained above the 2% target the Federal Reserve has set, and it did not include what the report described as the newer gasoline spike tied to the war.
Gary Schlossberg of Wells Fargo Investment Institute said the market should expect a spring increase in inflation linked to the energy price spike tied to the Iran war, and that the duration of that shock would help determine where headline inflation lands by year-end. Investors also appeared to be watching whether stronger energy prices, combined with a weaker labor picture, could produce a worst-case “stagflation” scenario for which the Fed has limited tools, according to the reporting.
On Wall Street, company-specific results added to the day’s uneven tone. Campbell’s shares fell 7.1% after the company reported weaker profit than analysts expected for the latest quarter, citing struggles in its snack business and issuing forecast cuts for revenue and profit for the fiscal year. Oracle, by contrast, rose 9.2% after it reported stronger profit and revenue than analysts expected and raised its revenue-growth forecast next fiscal year, citing demand for cloud computing used for artificial-intelligence training and inferencing.
Outside the U.S., European indexes fell after stronger performance in Asia, with Germany’s DAX down 1.4% while Japan’s Nikkei 225 rose 1.4%. In bond markets, Treasury yields climbed as oil prices added pressure, with the 10-year Treasury yield rising to 4.22% from 4.15% late Tuesday, a move that tends to weigh on other asset prices.
Traders also pushed back timelines for when the Federal Reserve could resume interest-rate cuts, in part because of worries that higher oil prices could keep inflation elevated. President Donald Trump has repeatedly called for quicker rate cuts, which investors said could boost the economy and jobs but also risk worsening inflation.