Oil prices rise, and stocks fall worldwide after Trump says ceasefire with Iran is 'over'

NEW YORK (AP) — Oil prices are rising, and stock markets are falling worldwide Wednesday after President Donald Trump raised doubts about the temporary truce in the war with Iran.

The S&P 500 fell 0.6% after Trump said the agreement to pause fighting was “over,” though he added that he would allow negotiations to continue. The Dow Jones Industrial Average was down 535 points, or 1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.

The action was stronger in the oil market, where the price for a barrel of Brent crude climbed 5.3% to $78.12 after briefly topping $79 in the morning. That’s still well below its peak from earlier in the war, when the price for the most actively traded contract reached nearly $120. But the jump is unsettling because oil prices had just dropped back to where they were before the war.

The worry is that a continuation of the war will block the Strait of Hormuz and keep oil tankers bottled up in the Persian Gulf instead of delivering crude to customers worldwide. That could worsen inflation, which economists expected would ease with oil prices, and in turn force the Federal Reserve and other central banks to raise interest rates.

Higher rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments.

Stock markets in Europe turned lower, and oil prices climbed immediately after Trump said, “For me, I think it’s over” about the status of the ceasefire. He added that U.S. representatives can continue negotiations, but he cast doubt on the outcome. “They can talk, but I think they’re wasting their time,” he said.

Trump later said the United States was preparing for another night of strikes against Iran.

On Wall Street, companies with big fuel bills fell to some of the biggest losses. United Airlines lost 3.4%, and Norwegian Cruise Line Holdings fell 2.1%.

In the bond market, Treasury yields ticked higher as oil prices rose. The yield on the 10-year Treasury rose to 4.57% from 4.55% late Tuesday and from just 3.97% before the war with Iran began. That could lead to higher rates for mortgages and other loans going to U.S. households and businesses, while cranking up the pressure on prices for investments.

In stock markets abroad, losses for European markets worsened after Trump made his comments, and Germany’s DAX lost 1.7%.

In Asia, South Korea’s Kospi dropped 5.3% and continued its sharp swings amid dueling worries and euphoria about the AI stocks that dominate its market.

Hong Kong’s Hang Seng index was an outlier and rose 3%.

Shares that trade in Hong Kong of Chinese AI startup Zhipu, known also as Z.ai and traded as Knowledge Atlas Technology, jumped 13.4%.

A six-month lock-up period for “cornerstone” investors following its January trading debut in Hong Kong expires this week. China National Radio reported late Tuesday that nearly 70% of Zhipu’s cornerstone investors are committed to stay on, despite previous worries that the lock-up period expiration could trigger a sell-off.

Zhipu’s share price has risen more than 1,300% since its debut.

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AP Business Writers Matt Ott, Chan Ho-him and Elaine Kurtenbach contributed to this report.