Stocks rise and oil prices ease as Wall Street keeps yo-yoing because of the war with Iran

NEW YORK (AP) — Hopes for a possible end to the war with Iran pushed stocks higher on Wall Street Wednesday, while oil prices eased.

The S&P 500 rose 0.5% in its latest flip - flop after the United States delivered a plan to pause the war to Iran. The Dow Jones Industrial Average added 305 points, or 0.7%, and the Nasdaq composite gained 0.8%.

But the moves were shaky, and the S&P 500 briefly came close to erasing all of its jump, which maxed out at 1.2% during the morning. Financial markets have swung sharply since the war began more than three weeks ago, and many of the reversals have struck hour to hour as uncertainty continues to dominate about how long the war will last.

Keeping up that uncertainty on Wednesday: Iran’s foreign minister, Abbas Araghchi, said in an interview with Iranian state TV that his government has not engaged in talks to end the war, “and we do not plan on any negotiations.”

Iran also launched more attacks on Israel and Gulf Arab countries, including an assault that sparked a huge fire at Kuwait International Airport, while coming under attack itself. The U.S. military deployed paratroopers and more Marines to the region.

Optimism, though, was nevertheless evident in financial markets worldwide. Stock indexes climbed more than 1% in London, Paris and Shanghai. Tokyo’s Nikkei 225 leaped 2.9%.

The price for a barrel of Brent crude delivered in June fell 3% to settle at $97.26. Hopes rose that a cooldown in fighting could allow oil and natural gas to flow more freely from the Persian Gulf to customers worldwide. Many oil tankers are currently stuck outside the Strait of Hormuz off Iran’s coast, and the blockage has sent Brent crude’s price to nearly $120 per barrel at times.

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 beginning of the war. That in turn could lessen the pressure on the economy.

The yield on the 10-year Treasury fell to 4.32% from 4.39% late Tuesday, though it remains well above its 3.97% 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 3.4% to settle at $4,552.30 per ounce.

Gold’s price had briefly gotten near $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, they make gold, which pays its investors nothing, less attractive in comparison.

On Wall Street, Arm Holdings soared 16.4% after the U.K. company announced a suite of chips for data centers and artificial-intelligence technology.

Robinhood Markets rallied 5% to help lead U.S. stocks after its board authorized a program to send up to $1.5 billion to shareholders by buying back the company’s stock.

Terns Pharmaceuticals rose 5.7% after Merck said it would buy the oncology company in an all-cash deal valuing it at $6.7 billion. Merck rose 2.6%.

On the losing end of Wall Street was On Holding. The Swiss company that sells On shoes slumped 11.2% after saying its chief executive officer, Martin Hoffmann, is stepping down.

In Hong Kong, Pop Mart International Group tumbled 22.5% after the company behind the popular Labubu dolls reported explosive growth in profit and revenue, but not enough to meet analysts’ expectations.

The stock prices for the parent companies of YouTube and Instagram held relatively steady after a jury found them liable in a first-of-its-kind lawsuit that aimed to hold social media platforms responsible for harm to children using their services. Alphabet added 0.2%, and Meta Platforms rose 0.3%.

All told, the S&P 500 rose 35.53 points to 6,591.90. The Dow Jones Industrial Average gained 305.43 to 46,429.49, and the Nasdaq composite climbed 167.93 to 21,929.83.

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AP Business Writers Chan Ho-him and Mat Ott contributed.