As investors watched Middle East events and processed President Donald Trump’s promise to escalate the fight with Iran, stocks were erratic and oil prices skyrocketed on Thursday.
After falling more than 650 points earlier, the Dow dropped 61 points, or 0.13%, to reduce losses. After falling by more than 1.5% earlier, the S&P 500 and Nasdaq both increased by 0.11% and 0.18%, respectively, erasing losses.
Following claims from Iran’s semi-official news agencies that Iran and Oman are writing a pact to expedite trade across the Strait of Hormuz, stocks, which had opened lower on Thursday, gained momentum. When oil might start to flow across the strait again is a major concern for traders.
Following Trump’s announcement in an evening speech to the country on April 1 that he had neither a clear departure strategy nor a solution to the effective closure of the strait, which has cut off one-fifth of the world’s oil supply, oil prices increased and market volatility remained high.
Investors fear that the battle will continue to drive up global energy prices, which will increase inflation and hinder economic growth. According to a report from Felix Vezina-Poirier, chief strategist at BCA Research, “the fog of war is still thick and crude flows are still too low to sound the all-clear.
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