Falling oil prices send stocks higher

NEW YORK — Oil prices are down, and stocks are up Monday, though such moves have been quick to change since the war in Iran began.

The S&P 500 rose 1% in early trading, coming off its third straight losing week, its longest such streak in a year. The Dow Jones Industrial Average was up 325 points, or 0.7%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.2% higher.

The driver for markets once again was the price of oil. A barrel of benchmark U.S. crude fell 4.1% to $94.62, easing some pressure off the economy after topping $102 earlier in the morning. Brent crude, the international standard, fell 1.4% to $101.72 per barrel after earlier getting as high as $106.50.

Oil prices have been mostly ripping higher from roughly $70 per barrel since the United States and Israel began their attacks on Iran. In response, Iran hit energy infrastructure in the Persian Gulf area with drones and missiles. It also effectively halted traffic through the narrow Strait of Hormuz, where a fifth of the world’s oil typically sails. That has oil producers cutting production because their crude has nowhere to go.

The worry in financial markets is that if the strait remains closed for a long time, it could keep enough oil off the market to drive inflation up to a debilitating level for the global economy.

President Donald Trump over the weekend demanded that other countries hurt by the closure of the Strait of Hormuz “take care of that passage” and said his country “will help - A LOT!”

European countries, meanwhile, demanded to know more about Trump’s plans for the war on Iran and when the conflict might end as they weighed his demand.

The U.S. stock market has a track record of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don’t stay too high for too long. Many professional investors are expecting that to be the case again this time around.

Escalations have been mounting quickly, to be sure, but that could suggest “both sides are facing growing constraints that may prevent a long conflict,” according to Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.

For all its dramatic swings, the S&P 500 is still only about 4% below its all-time high.

On Wall Street, National Storage Affiliates leaped 28.6% to help lead the market after Public Storage said it would buy its 69 million rentable square feet in an all-stock deal valuing it at $10.5 billion. Public Storage fell 2.3%.

Dollar Tree rose 2.1% after reporting a stronger profit for the latest quarter than analysts expected, even as fewer shoppers visited its stores.

Nebius Group, a Dutch AI cloud company, saw its stock that trades in the United States leap 14% after announcing a five-year infrastructure contract with Meta Platforms that could be worth up to $27 billion.

Meta rose 3.4% and was one of the strongest forces lifting the S&P 500, along with other Big Tech stocks.

In stock markets abroad, indexes rose modestly in Europe following a mixed finish in Asia.

Stocks jumped 1.4% in Hong Kong but slipped 0.3% in Shanghai, for example.

In the bond market, Treasury yields eased as falling oil prices took some pressure off inflation worries. A report showing a weakening of manufacturing activity in New York state also weighed on yields.

The yield on the 10-year Treasury fell to 4.23% from 4.28% late Friday.