Oil prices dip, stock markets soar on Iran war off ramp hopes – National

Hope for a possible end to the war with Iran is taking over again on Wall Street Wednesday, and stocks are back to jumping while oil prices ease.

The S&P 500 rose 1.1 per cent in its latest flip – flop after the United States delivered a plan to pause the war to Iran. The Dow Jones Industrial Average was up 529 points, or 1.1 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.3 per cent higher.

Canada’s main stock index, the Toronto Stock Exchange, was up about 1.5 per cent as of publication.

The price for a barrel of Brent crude fell 5.4 per cent to US$94.78 on hopes that a cooldown in fighting could allow oil and natural gas to flow more freely from the Persian Gulf to customers around the world. Many oil tankers are currently stuck outside the Strait of Hormuz off Iran’s coast, and the blockage has sent Brent crude to nearly $120 per barrel at times.

But the moves in markets are still tentative, and they have been quick to swing since the war began more than three weeks ago with strikes by the United States and Israel on Iran. Many of the sudden reversals in momentum have struck hour to hour as uncertainty continues to dominate about how long the war will last.

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Keeping up that uncertainty: Iran did not confirm receiving the U.S. proposal for a ceasefire, and it publicly dismissed the diplomatic effort while launching more attacks on Israel and Gulf Arab countries. Iran also continued to come under attack, and the U.S. military is deploying paratroopers and more Marines to the region.

Optimism, though, was nevertheless evident in financial markets worldwide. Stock indexes climbed more than one per cent from London to Paris to Shanghai. The Nikkei 225 in Japan leaped 2.9 per cent.

2:08International Energy Agency says global economy faces ‘major, major threat’ from Iran war

In the bond market, Treasury yields also eased. That could help soften the rise in rates for mortgages and other kinds of borrowing since the start of the war and in turn lessen some pressure on the economy.

The yield on the 10-year Treasury fell to 4.33 per cent from 4.39 per cent late Tuesday, though it remains well above its 3.97 per cent level from just before the war.

Even gold, which has been one of the investment world’s worst losers through the war, rose. It climbed 3.5 per cent to $4,558.10 per ounce.

Its price had briefly gotten around $5,400 early this month. That was before Treasury yields rushed higher on worries that high oil prices would drive inflation upward and prevent the Federal Reserve from cutting interest rates. When bonds are paying more in interest like that, they make gold, which pays its investors nothing, less attractive in comparison.

On Wall Street, companies with big fuel bills rallied thanks to easing oil prices.

Norwegian Cruise Line Holding climbed 4.2 per cent, and United Airlines gained four per cent.

Robinhood Markets leaped 7.1 per cent to help lead the market after its board authorized a program to send up to $1.5 billion to shareholders by buying back the company’s stock.

– With a file from Global’s Ariel Rabinovitch

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