A volatile day in energy markets helped US stock indexes pare earlier losses on Thursday, after Brent crude fell from intraday levels that had threatened to keep inflation worries elevated. Hour-to-hour swings for oil prices continued to jolt Wall Street, and the latest move in the oil market set the tone for trading across stocks and bonds.
Brent crude briefly got above $109 per barrel in the morning before trading around a reversal later in the day. By midday, it had erased its earlier gains and ended the session down 2.3% at $102.58, easing some of the pressure that had been building on markets through the bond market.
Oil prices have been yo-yoing as uncertainty about how long the war with Iran keeps the Strait of Hormuz shut has disrupted normal shipping. With tankers prevented from exiting the Persian Gulf to deliver crude to customers worldwide, prices have tended to reflect the risk of supply constraints.
The bond market’s influence also weighed on equities during the earlier part of the day. Yields had climbed so high that they threatened to slow economies worldwide and undercut stock valuations, while also lifting mortgage rates and potentially curbing corporate borrowing plans—an impact that can filter through to sectors tied to growth and capital spending.
The 10-year Treasury yield traded near 4.63% in the morning before falling back to 4.55% after the oil price turnaround later in the day. The yield was reported at 4.57% late Wednesday and at 4.67% the day before, with the intraday shift aligning with the rebound in equities.
Some groups of stocks benefited more than others when yields eased and oil prices dropped. The Russell 2000 index of smaller US companies climbed 0.9%, while stocks of companies with big fuel bills rose as oil prices eased, including Southwest Airlines, up 2.7%, and American Airlines, up 4.9%.
Corporate results and forecasts added to the stock-specific mix. Ralph Lauren jumped 13.9% after reporting stronger profit and revenue for the latest quarter than analysts expected, helping offset other declines that came in the same market window.
Nvidia’s stock moved sharply as investors weighed a strong report against concerns that the stock’s large prior run left less room for optimism. Nvidia is described as one of the most influential stocks on Wall Street because of its size, and its quarterly results and forward outlook beat expectations, while CEO Jensen Huang told investors that “The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed.” Even so, the stock was reported to have swiveled between gains and losses before falling.
Other market commentary in the report pointed to profit-taking after Nvidia had surged nearly 70% over the prior year, more than double the S&P 500’s 27% jump. The report also noted that the broader AI industry faces criticism for becoming too expensive and for being seen as circular, after Nvidia bought ownership stakes in companies that use its chips.
Walmart fell 7.3% after reporting profit, alongside another quarter of revenue that still impressed, but with weaker forecasts for upcoming profit than analysts expected. The selloff was attributed to investor sensitivity to inflation pressures that have made consumers more cautious about spending.
In dollar terms for the indexes, the S&P 500 rose 12.75 points to 7,445.72, while the Dow Jones Industrial Average climbed 276.31 points to 50,285.66 and the Nasdaq Composite gained 22.74 points to 26,293.10.
A preliminary snapshot of the US economy suggested businesses may still feel inflation’s bite. A flash survey from S&P Global said services growth slowed unexpectedly, though growth for manufacturers was better than forecast, and Chris Williamson, chief business economist at S&P Global Market Intelligence, said “The damaging economic impact from the war in the Middle East is becoming increasingly evident in the business surveys.”
Another report offered a separate signal on the job market, saying the number of US workers applying for unemployment benefits last week unexpectedly declined, pointing to fewer layoffs than economists had expected.
Markets abroad were mixed. South Korea’s Kospi jumped 8.4% on strength for technology stocks, led by Samsung Electronics’ 8.5% gain after its labor union and management reached an agreement late Wednesday that averted a strike. SK Hynix, a chip company partnering with Nvidia, rose 11.2%. Japan’s Nikkei 225 gained 3.1%, while Hong Kong and Shanghai indexes fell 1% and 2%, respectively.