Key facts
- Oil prices and stock markets stabilized after initial surges following U.S.-Iran tensions.
- President Donald Trump indicated that recent U.S.-Iran escalations would not lead to long-term military action.
- Brent crude futures fell 0.7% to $77.45, down from $78.02 the previous day.
- The S&P 500 rose 0.2%, the Dow Jones Industrial Average was up 71 points, and the Nasdaq composite was 0.2% higher.
- Micron Technology's stock jumped 7.3% after announcing significant U.S. semiconductor manufacturing investments.
- The average price for a gallon of regular gasoline rose to $3.85.
Oil prices and stock markets steadied on Thursday, a day after initial surges driven by escalating U.S.-Iran tensions and the unraveling of a ceasefire. President Donald Trump's remarks suggesting the recent conflict would not lead to long-term military action provided some calm to financial markets worldwide.
The S&P 500 rose 0.2%, while the Dow Jones Industrial Average was up 71 points, or 0.1%, and the Nasdaq composite gained 0.2%. In the oil market, Brent crude futures fell 0.7% to $77.45 per barrel, down from $78.02 the previous day but still above its $71.80 price from the end of last week.
Analysts had warned that a return to full-blown war could block oil tankers from the Strait of Hormuz, disrupting global crude delivery and potentially worsening inflation. This scenario could force the Federal Reserve and other central banks to raise interest rates, which can slow economic growth and negatively impact investment prices.
However, Trump's comments on Wednesday that the fighting would not be 'long-term' introduced uncertainty but also eased immediate fears of a prolonged conflict. The swings in oil prices have halted a recent decline in gasoline prices, with the average price for a gallon of regular gasoline climbing a nickel overnight to $3.85.
In the technology sector, Micron Technology's stock surged 7.3% after the company announced plans to invest up to $3 billion in U.S. semiconductor manufacturing, including $500 million for GlobalWafers' facility in Texas. This provided support to the S&P 500. In South Korea, the Kospi index rose 0.6%, with SK Hynix jumping 5.3% as it prepares for a U.S. stock listing.
Stock markets broadly benefited from stabilizing bond yields, with the 10-year Treasury yield edging down to 4.55% from 4.56%. These yields had been climbing due to concerns about high oil prices and potential interest rate hikes.
Elsewhere, PepsiCo fell 5% despite reporting slightly better-than-expected revenue, citing weakening trends in its North American food and drinks businesses. In Asian markets, Shanghai's stock index rose 1.7% and Paris gained 0.7%. Hong Kong's Hang Seng index slipped 0.7%, with shares of Apple supplier Luxshare falling 1.5% in its trading debut.