A turn lower for oil prices helps U.S. stocks erase earlier losses
U.S. stocks rebounded Thursday after oil prices dropped from near $109 per barrel to $102.93, easing inflation fears and reducing pressure on bond yields. The S&P 500, Dow Jones, and Nasdaq all rose modestly, while smaller stocks and airline shares gained, though Nvidia and Walmart saw declines following mixed earnings reports.
U.S. stock indexes recovered Thursday after oil prices reversed earlier gains, falling 2% to $102.93 per barrel from a morning peak of $109. The S&P 500 climbed 0.2%, the Dow Jones rose 0.7% (351 points), and the Nasdaq gained 0.2%, erasing earlier losses tied to oil volatility. The shift in oil prices eased pressure on bond yields, which had threatened to slow global economic growth. The 10-year Treasury yield dropped to 4.55% after briefly nearing 4.63%, down from 4.67% the prior day. Lower yields benefited smaller stocks, with the Russell 2000 index surging 1.2%, while airline shares like Southwest Airlines (+2.8%) and American Airlines (+3.6%) rose due to reduced fuel costs. Ralph Lauren jumped 15% after reporting stronger-than-expected quarterly profits, while Nvidia fell 1.5% despite beating earnings estimates and forecasting AI-driven revenue growth. The company’s stock had already swung between gains and losses, with analysts citing profit-taking after a 70% surge over the past year. Walmart dropped 6.8% after delivering solid revenue but weaker profit forecasts, reflecting consumer caution amid high inflation. Oil’s volatility stems from uncertainty over the Strait of Hormuz closure due to the Iran war, which has disrupted global supply. Higher yields had also pressured mortgage rates and corporate borrowing, particularly for AI infrastructure projects. A flash survey suggested businesses are feeling inflation’s impact, reinforcing concerns about economic growth.
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