Wall Street Stocks Rise as Oil Prices Swing/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks moved modestly higher as strong corporate earnings and cooler inflation supported Wall Street.
BlackRock led major gainers while declining Treasury yields reduced concerns about Federal Reserve rate hikes. Oil prices remained volatile as the Iran war and Strait of Hormuz tensions threatened global energy supplies.

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Wall Street Stocks Quick Looks

• The S&P 500 gained 0.2% in Wednesday trading.
• The Dow rose 173 points, or 0.3%.
• The Nasdaq composite increased 0.3%.
• BlackRock jumped 7.7% following stronger earnings.
• BlackRock’s iShares assets topped $6 trillion.
• Bank of New York Mellon gained 2.9%.
• Cintas rose 4.2% after beating profit expectations.
• Elevance Health dropped 8.9%.
• Wholesale inflation slowed to 5.5% in June.
• Fed rate hike expectations fell sharply.
• The 10-year Treasury yield declined to 4.55%.
• Brent crude briefly climbed above $86 a barrel.
• Iran threatened broader Middle East energy exports.
• South Korea’s Kospi surged 6.2%.
• AI and semiconductor stocks regained momentum.

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Deep Look

Wall Street Stocks Rise as Oil Prices Swing

U.S. stocks edged higher Wednesday as strong corporate earnings and encouraging inflation data helped Wall Street withstand another volatile session for global oil prices.

The S&P 500 gained 0.2% and remained on course for its fourth advance in five trading sessions.

The Dow Jones Industrial Average rose 173 points, or 0.3%, by late Wednesday morning. The Nasdaq composite also moved 0.3% higher.

Investors balanced strong earnings reports from major U.S. companies against continuing uncertainty surrounding the war with Iran and threats to energy exports through the Strait of Hormuz.

Oil prices swung sharply during the session and remained close to their highest levels in roughly a month.

BlackRock Earnings Lift Wall Street

BlackRock was among the strongest performers in the U.S. stock market.

Shares of the investment management giant jumped 7.7% after the company reported quarterly profit and revenue that exceeded Wall Street forecasts.

CEO Laurence Fink said BlackRock’s iShares investment funds surpassed $6 trillion in assets under management during the quarter.

That figure has roughly doubled over the past three years.

The results added to optimism surrounding the latest corporate earnings season.

Investors are closely monitoring company profits because major stock indexes remain near record levels.

Strong earnings growth will be necessary to justify the significant increases in stock valuations seen across Wall Street.

Strong Corporate Earnings Support Stocks

Other major companies also delivered better-than-expected results.

Bank of New York Mellon gained 2.9% after reporting strong earnings.

The company’s performance followed a series of encouraging profit reports from several of America’s largest banks a day earlier.

Cintas climbed 4.2%.

The company, which provides office uniforms, restroom products and other workplace supplies, reported quarterly profit that exceeded analysts’ expectations.

Those gains helped offset weakness in Elevance Health.

Shares of the health insurer dropped 8.9% despite the company reporting profit and revenue that surpassed Wall Street forecasts.

The mixed reaction demonstrated the high expectations investors have placed on corporate America.

Simply beating analyst forecasts may not always be enough to push a stock higher when valuations are already elevated.

Cooler Wholesale Inflation Boosts Markets

Wall Street also received support from another encouraging inflation report.

U.S. wholesale inflation slowed to an annual rate of 5.5% in June.

That was down from 6% in May.

Economists had expected wholesale inflation to accelerate.

Instead, producer price pressures eased.

The report followed consumer inflation data released Tuesday that also came in below economists’ expectations.

Together, the reports have reduced fears that the Federal Reserve will need to raise interest rates soon.

Higher interest rates can help control inflation by slowing borrowing and spending.

However, they can also weaken economic growth and pressure stocks, bonds and other investments.

Fed Rate Hike Expectations Fall Sharply

Traders now see only about a 10% chance that the Federal Reserve will raise its benchmark interest rate at its next policy meeting.

That represents a dramatic shift in market expectations.

On Monday, before the latest inflation reports, traders estimated the probability of a rate increase at nearly 42%, according to CME Group data.

Comments from New York Federal Reserve President John Williams also encouraged investors.

Williams said that “there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.”

His comments reinforced expectations that the Federal Reserve may have additional time to monitor economic conditions before changing interest rates.

Treasury Yields Decline

Bond yields moved lower following the inflation data and Williams’ remarks.

The yield on the 10-year Treasury declined to 4.55%.

It stood at 4.58% late Tuesday and 4.62% a day earlier.

Falling Treasury yields can support stock prices.

Lower bond yields make fixed-income investments less competitive with stocks and can also reduce borrowing costs throughout the economy.

Technology and growth stocks can particularly benefit from declining yields because investors often value those companies based on expected future profits.

Still, investors remain cautious because inflation risks have not disappeared.

Iran War Keeps Inflation Risks Elevated

The war with Iran continues to create significant uncertainty for global markets.

The United States and Iran have exchanged strikes across the Middle East for several days.

The conflict has increasingly focused on the Strait of Hormuz, one of the world’s most important energy shipping routes.

Iran’s Revolutionary Guard threatened Wednesday to halt energy exports from the Middle East in response to a U.S. military blockade targeting tankers carrying Iranian oil.

“The export of oil and gas from the region will be either for everyone or for no one,” the Revolutionary Guard said.

The warning immediately added to concerns about global energy supplies.

A prolonged disruption could push oil and natural gas prices sharply higher.

Oil Prices Swing Near One-Month Highs

Brent crude briefly climbed above $86 per barrel Wednesday morning.

Prices later reversed direction.

Brent fell to $83.37 per barrel, a decline of 1.6% from the previous session.

The rapid price movements reflected uncertainty about the conflict.

Oil traders are attempting to determine whether the fighting will disrupt shipments through the Strait of Hormuz.

Higher energy prices could reverse recent improvements in U.S. inflation.

Gasoline, transportation and manufacturing costs can all increase when crude oil prices rise.

That could complicate the Federal Reserve’s interest rate decisions later this year.

AI Stocks Recover After Volatile Weeks

Technology stocks also strengthened internationally as companies connected to the artificial intelligence boom regained momentum.

AI-related stocks have experienced several turbulent weeks.

Investors have questioned whether valuations became too expensive during the rapid expansion of artificial intelligence investment.

There are also concerns that enormous spending on AI chips and data centers may fail to produce enough profits or productivity improvements.

Wednesday’s market action provided some relief.

South Korea’s Kospi index surged 6.2%.

The South Korean market is heavily influenced by Samsung Electronics and SK Hynix, two major technology companies.

The Kospi’s rally followed several dramatic declines earlier in July.

The index has already suffered single-session drops of 8.9%, 7.9% and 5.3% this month.

ASML Results Boost Semiconductor Optimism

European technology stocks also received support from ASML.

The Amsterdam-based chipmaking equipment company reported stronger quarterly revenue growth than expected.

CEO Christophe Fouquet said continuing progress in artificial intelligence has encouraged customers to accelerate expansion plans.

ASML also issued a summer revenue growth forecast that exceeded analyst expectations.

The results helped calm concerns about the semiconductor industry.

Demand for advanced chips has surged because of AI development.

Companies are investing billions of dollars in data centers and computing infrastructure.

Investors are now watching closely to determine whether that spending boom can continue.

China Economic Growth Slows

Asian markets also reacted to new economic data from China.

Stocks rose 1.4% in Hong Kong.

Shanghai stocks declined 0.3%.

China’s government reported that the world’s second-largest economy expanded at a 4.3% annualized pace during the latest quarter.

That was down from 5% growth at the beginning of the year.

The slowdown adds another source of uncertainty for global investors.

China plays a major role in international trade, manufacturing and commodity demand.

Weaker Chinese growth could pressure global companies while potentially reducing demand for oil and other raw materials.

Wall Street Balances Earnings and Global Risks

Wednesday’s market gains reflected a complicated investment environment.

Corporate earnings remain strong.

Inflation data has improved.

Federal Reserve rate hike expectations have declined.

Treasury yields are moving lower.

Those factors have helped support stocks near record levels.

However, the Iran war and uncertainty surrounding the Strait of Hormuz remain significant risks.

A prolonged energy disruption could push oil prices higher and reignite inflation.

At the same time, investors continue to debate whether artificial intelligence stocks have become too expensive.

For now, Wall Street is moving cautiously higher.

But with oil prices swinging rapidly and geopolitical tensions elevated, market volatility could remain a major feature of summer trading.

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