Oil Prices Jump 3% as Wall Street Trades Mixed Amid Iran War/ Newslooks/ WASHINGTON/ J. Mansour/ Oil prices climbed another 3% Wednesday as the war with Iran continued to disrupt shipping through the Strait of Hormuz. Wall Street traded unevenly, with the S&P 500 and Dow edging higher while the Nasdaq slipped. Strong corporate earnings supported stocks, but rising energy costs renewed concerns about inflation, interest rates and business profits.
Quick Look
- Brent crude rose 3.1% to $93.85 per barrel after briefly exceeding $95.
- The S&P 500 gained 0.1%, while the Dow rose 134 points.
- The Nasdaq composite slipped 0.1%.
- Super Micro Computer surged 24.1% on an improved profit-margin forecast.
- Philip Morris International and AT&T gained after reporting strong results.
- GE Vernova fell 6.9% following weaker-than-expected profit.
- Investors awaited Alphabet’s earnings and updates about its AI spending.
- The 10-year Treasury yield increased to 4.64%.
- The average U.S. gasoline price rose to $4.06 per gallon.
- Shipping disruptions in the Strait of Hormuz continued to support oil prices.
Deep Look
Wall Street Moves Between Gains and Losses
NEW YORK — U.S. stocks traded unevenly Wednesday as investors weighed encouraging corporate earnings against another sharp increase in oil prices caused by the continuing war with Iran.
The S&P 500 gained 0.1% after moving between modest advances and declines during early trading. The index was coming off its strongest session in three weeks.
The Dow Jones Industrial Average rose 134 points, or 0.3%, as of 11:45 a.m. Eastern time. The technology-heavy Nasdaq composite slipped 0.1%.
Most companies in the S&P 500 advanced following another series of stronger quarterly reports. Expectations remain elevated because stock prices had already approached record levels in anticipation of solid earnings.
Philip Morris and AT&T Rise After Earnings
Philip Morris International gained 3.1% after its quarterly profit and revenue surpassed analysts’ expectations.
The Marlboro seller said shipments of its smoke-free products increased 7.5%.
AT&T climbed 2.6% after reporting a stronger profit than Wall Street had forecast. CEO John Stankey said the telecommunications company was accelerating plans to return approximately $10 billion to shareholders through stock buybacks during the year.
Super Micro Computer Surges 24%
Super Micro Computer jumped 24.1% after the artificial-intelligence server company said its latest quarterly profit margins would likely be stronger than previously forecast.
The company also indicated that revenue would probably finish near the lower end of its projected range of $11 billion to $12.5 billion.
Those gains helped counter a 6.9% decline for GE Vernova, which reported quarterly profit below analysts’ expectations.
Alphabet Earnings Put AI Spending in Focus
Alphabet shares edged 0.1% higher before the Google parent company’s earnings report, scheduled for release after the market closed.
Investors are closely monitoring Alphabet because it is among Wall Street’s largest companies and one of the biggest spenders on AI technology.
Markets are looking for evidence that billions of dollars invested in processors, computer memory, data centers and other AI infrastructure are producing sufficient gains in productivity and profit.
Without such evidence, shares of chipmakers and other beneficiaries of the AI boom could appear overvalued following their rapid advances.
Micron Remains Volatile
Micron Technology moved between a decline of 3.6% and a gain of 0.8% during morning trading.
The stock had surged 14.4% during the first two sessions of the week, recovering nearly all of its 13.3% loss from the previous week.
Despite the recent volatility, Micron shares remained approximately 240% higher for the year.
Concerns about high valuations and the potential financial returns from AI investment have kept technology and semiconductor stocks at the center of Wall Street’s recent swings.
Brent Crude Briefly Moves Above $95
Oil prices continued to place pressure on the wider market by raising expenses for businesses and potentially reducing corporate profits.
Brent crude, the international benchmark, rose 3.1% to $93.85 per barrel. It briefly exceeded $95 during the morning, reaching its highest level in almost six weeks.
Brent had traded below $72 early in July, approximately where it stood before the war with Iran.
The latest increase came as fighting in the Middle East continued to prevent many tankers from using the Strait of Hormuz to leave the Persian Gulf.
About one-fifth of globally traded oil and natural gas normally passes through the narrow waterway.
Higher Oil Prices Renew Inflation Concerns
Expensive oil could accelerate inflation by increasing transportation, manufacturing and operating costs across the economy.
A renewed rise in inflation could encourage the Federal Reserve and other central banks to increase interest rates. Higher rates can slow economic growth and weigh on stocks, bonds and other investments.
Higher Treasury yields have already helped push long-term U.S. mortgage rates to their highest point in nearly a year.
US Gasoline Average Reaches $4.06
AAA reported that the national average for regular gasoline rose overnight to $4.06 per gallon.
That remained below the May peak of approximately $4.56, but gasoline had cost less than $3 per gallon before the United States and Israel attacked Iran in late February.
Continued increases could place additional financial pressure on households while also contributing to higher costs for food and other goods.
European Stocks Rise as Asian Markets Finish Mixed
European markets broadly advanced Wednesday following mixed trading in Asia.
London’s FTSE 100 gained 1.3%, while Hong Kong’s Hang Seng declined 1%, representing two of the larger moves among global indexes.
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