Stocks Rise Amid Economic Surprise as Oil Whipsaws: Markets Wrap
(Bloomberg) — A report underscoring economic resilience and cooling inflationary pressures drove stocks higher at a time when the war in the Middle East clouds the growth outlook. Bitcoin topped $73,000. Oil whipsawed.
Equities rebounded after data showed the US service economy expanded at the fastest pace since mid-2022 while a price index hit an almost one-year low. A rally in tech megacaps also drove the market higher, with the Nasdaq 100 jumping 1.6%. Crude rose to around $75 in a volatile session that saw traders parsing mixed war signals. Bonds stabilized.
Defense Secretary Pete Hegseth said the US and Israel are on the cusp of taking complete control of Iran’s airspace as he laid out plans to step up attacks deeper in the country. Meantime, Iran denied a report it had reached out to the US to negotiate an end to the conflict.
In all, about a dozen nations have become embroiled in the war, with Tehran striking US bases and embassies across the Middle East, and Israel launching an air and ground offensive against Hezbollah in Lebanon. Turkey also came under fire, a first for a member of the North Atlantic Treaty Organization since the conflict began.
Although risk assets face a “significant headwind” from war in the Middle East and anxiety over artificial intelligence, economic strength and robust earnings mean the extent of a pullback will be limited, according to Goldman Sachs Group Inc.’s Peter Oppenheimer.
“While further escalation remains a risk, we think the more likely outcome is an increase in market risk aversion that likely lasts only a short time until investors can see a winding down of hostilities,” said Scott Wren at Wells Fargo Investment Institute.
The S&P 500 rose 0.8%. The dollar fell 0.1%. The yield on 10-year Treasuries was little changed at 4.07%.
Read: Fed’s Miran Says He Still Wants Rate Cuts Despite Iran War
“We have been seeing a bit of a squeeze on those bearish positions accumulated since the start of the week, as a tentative ‘risk-on’ mood crept back in,” said Fawad Razaqzada at Forex.com. “The conflict is ongoing and there’s no concrete evidence of de-escalation. This could keep pressure on risk assets for a while yet.”
As US stock investors endure bouts of volatility in the wake of the US war on Iran, Citadel Securities’ Scott Rubner said his fundamental analysis of the market signals now is a time to turn bullish on equities.
From a technical standpoint, Jonathan Krinsky at BTIG notes that the S&P 500 has reclaimed the 6,800 level, creating the possibility of a “bear trap” below that support.
“It does face some initial resistance in the 6,880-6,900 range, but as of now, we continue to think a low has been made and we should be playing offense more than defense,” he said.
Corporate Highlights:
Wall Street expects Broadcom Inc. to report strong earnings Wednesday. Apple Inc. rolled out the $599 MacBook Neo in its biggest push yet into low-end laptops. CrowdStrike Holdings Inc. projected quarterly sales that were roughly in line with analysts’ estimates. Bath & Body Works Inc. said sales will decline less than analysts expect. What Bloomberg Strategists say…
“Markets are set up for a sharp reversal the moment an Iran conflict off-ramp turns tangible, because the war premium sitting in oil is fleeting given fundamentals.” —Michael Ball, Macro Strategist, Markets Live. For the latest analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.8% as of 12:23 p.m. New York time The Nasdaq 100 rose 1.6% The Dow Jones Industrial Average rose 0.6% The MSCI World Index rose 0.7% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1633 The British pound was little changed at $1.3353 The Japanese yen rose 0.5% to 157.01 per dollar Cryptocurrencies
Bitcoin rose 7.4% to $73,099.07 Ether rose 8.5% to $2,135.64 Bonds
The yield on 10-year Treasuries was little changed at 4.07% Germany’s 10-year yield was little changed at 2.75% Britain’s 10-year yield declined three basis points to 4.44% Commodities
West Texas Intermediate crude rose 0.5% to $74.95 a barrel Spot gold rose 1% to $5,138.74 an ounce ©2026 Bloomberg L.P.
