NEW YORK (AP) – The U.S. stock market ended Wednesday after two days of punishing changes after oil prices rose and reports provided encouraging updates on the economy.
The S&P 500 rose 0.8% and recovered most of its losses since the start of the war with Iran. The Dow Jones industrial average rose 238 points, or 0.5%, and the Nasdaq Composite rose 1.3%.
The rally followed a tumultuous start on Wednesday, when South Korea’s Kospi stock index fell 12.1% for its worst loss in history. Uncertainty about the war has sent prices up and down in financial markets this week, with many taking their cue from what oil prices will do.
Oil prices moderated as trade moved west from Asia to Europe and across the Atlantic. After briefly rising above $84, international benchmark Brent crude traded at $81.40, back to where it was the day before. Benchmark US crude rose 0.1% to $74.66 a barrel.
Stocks also got a boost from signs of strength for the US economy.
U.S. business growth in the real estate, finance and other service industries last month accelerated to its fastest pace since the summer of 2022, a report said. Pushing for inflation, it also said that the prices of such businesses are rising at least at a lower rate than before the start of the war with Iran.
A second report suggests that US employers outside the government picked up their hiring last month. This could be a hopeful signal for a more comprehensive report on the overall labor market from the US government on Friday.
In financial markets, concerns are centered on how long the war with Iran will last, how high inflation will rise due to high oil prices, and how much corporate profits will sink as a result.
The US stock market has a history of breaking military conflicts in the Middle East relatively quickly, although this comes with the caveat that oil prices are not too high. It has some professional investors recommending patience through volatility, at least when it comes to financial markets.
Not everyone is optimistic.
“I think the situation in Iran has gotten out of hand, and I think the President of the United States, Donald Trump, has grossly miscalculated,” said Frances Lunn, CEO of VentureSmart Asia. “The situation is very tense.”
On Wall Street, a mix of companies helped rise Wednesday.
Stocks closed in the crypto industry rose as the price of bitcoin climbed back above $73,000. Coinbase Global rose 14.6%, and Robinhood Markets rose 8.1%.
Retailers and travel companies have been bolstered by hopes that a stronger economy and ease of jumps in gas prices will mean their customers may spend more.
