U.S. stocks climbed Thursday as traders balanced renewed optimism after a two-week ceasefire announcement in the war with Iran against lingering concerns that the truce could falter. Oil prices still ended higher, but they trimmed gains during the session, reflecting a market that was less swept up by the optimism driving the surge a day earlier.
Wall Street began with moderate losses after drops in Asian and European markets. The S&P 500 erased its dip and finished with a 0.6% gain, while the Dow added 275 points, or 0.6%, and the Nasdaq composite climbed 0.8% as both indexes recovered from their early declines.
One factor underpinning the rebound was an Israel development that eased some worries about the ceasefire announced late Tuesday. The AP report said Israel’s prime minister authorized direct negotiations with Lebanon, which helped calm concerns that the ceasefire might already be in trouble because of Israel’s bombardment of Lebanon.
Crude oil prices remained a key driver of the day’s risk mood. The AP report said U.S. crude pared some gains but still rose for the day amid uncertainty about when oil tankers can start fully flowing through the Strait of Hormuz, a narrow waterway that has been central to President Donald Trump’s demands of Iran.
In the commodities market, the AP report said the price for a barrel of benchmark U.S. crude rose 3.7% to settle at $97.87 after briefly nearing $103. Brent crude, the international benchmark, added 1.2% to $95.92 per barrel.
Strategists at Macquarie, led by Thierry Wizman, suggested that oil price pressures could persist. The report said they warned that risks remain for renewed fighting, which could lead customers worldwide to hoard oil supplies, keeping more fuel off the market in a way the report compared with disruptions caused by attacks on pipelines or tankers.
The report also described how oil prices have swung sharply and suddenly over the past weeks as expectations about whether the Strait of Hormuz would fully reopen have shifted. It said Brent had moved from roughly $70 a barrel before the war began in late February to more than $119 at times.
Even with the day’s volatility, the report said the main U.S. stock index tied to many 401(k) accounts remained close to record levels. It said the S&P 500 was 2.2% below its January record, after rising 41.85 points to finish at 6,824.66.
Individual stocks reflected the broader mix of results and deal news. Constellation Brands climbed 8.5% after reporting stronger-than-expected results for the latest quarter, but it pulled its forecasts for the following fiscal year, citing “limited near-term visibility” and other factors. CoreWeave rose 3.5% after announcing an expanded $21 billion deal with Meta Platforms to provide AI cloud capacity through December 2032, while Simply Good Foods sank 18.1% after reporting a worse-than-expected revenue decline.
The AP report also pointed to mixed U.S. economic signals that helped keep the market’s pace in check. It said one report showed an underlying measure of inflation the Federal Reserve considers important was slightly hotter in February than economists expected, and another report showed more U.S. workers applied for unemployment benefits than economists expected, though the level remained relatively low compared with history.
In the bond market, Treasury yields swiveled up and down after the reports before pulling near where they were late Wednesday. The AP report said the 10-year Treasury yield edged down to 4.28% from 4.29%, still well above its 3.97% level from before the war, a shift that has pushed borrowing costs higher for mortgages and other kinds of loans.
The report said higher oil prices can complicate the Federal Reserve’s outlook on interest-rate cuts by adding upward pressure on inflation, even if the job market weakens. It also cited the release of minutes from the Fed’s latest meeting, saying a growing number of officials appeared to consider the possibility of a rate hike, and noted that markets abroad were lower, with South Korea’s Kospi down 1.6% and Germany’s DAX down 1.1%.