Stocks rose on Wednesday after a volatile previous session as investors eyed developments in the U.S.-Israeli war on Iran.
The Dow Jones Industrial Average added 180 points, or 0.4%. The S&P 500 traded up 0.3%, while the Nasdaq Composite moved 0.5% higher.
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Treasury Secretary Scott Bessent told CNBC on Wednesday that the U.S. is going to make “a series of announcements” to support the flow of oil through the Persian Gulf. This comes after President Donald Trump said Tuesday that the U.S. will give insurance to tankers in the Gulf and have the U.S. Navy escort tankers through the Strait of Hormuz, if necessary.
The rally in oil prices that has taken place in the wake of the war in the Middle East lost steam Wednesday following Bessent’s comments. Brent crude oil futures dipped 0.7%, while West Texas Intermediate crude futures were lower by more than 1%. Both ended Tuesday’s trading off their session highs, up more than 4%.
Bessent also said Wednesday that Trump’s 15% global tariff announced late last month will be implemented this week. Yet, he added that he believes U.S. tariff rates would “within five months” return to levels prior to the Supreme Court’s decision to strike down the president’s tariff policy.
Trump said on Tuesday that the U.S. would provide risk insurance to all maritime trade through the Persian Gulf, in an effort to get tankers moving through the Strait of Hormuz. Tanker traffic through the Strait — the world’s most vital transit route for crude oil — came to a halt after the Iranian Revolutionary Guard commander threatened to set fire to ships attempting the route.
Meanwhile, Israel said it had launched another round of attacks on Tehran, with the country’s defense minister vowing to “crush” the Iranian regime’s capabilities.
“We are in the headline-watching business at the moment, with competing stories shifting market sentiment an hourly basis yesterday,” Deutsche Bank’s Jim Reid wrote in a Wednesday note. “From a market perspective, the main issue is that there’s no sign of either side de-escalating, and if anything it looks as though things are still ratcheting up.”
As U.S. futures pointed to a positive open on Wall Street, stocks listed in Europe also staged a recovery on Wednesday.
“Amid all the noise we might be seeing some opportunities start to emerge in markets for longer term investors, in our view, especially if we start to see energy prices stabilize and potentially moderate in days and weeks ahead,” said James McCann, senior economist at Edward Jones, in a note.
