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Financial Markets 03/17 09:35
NEW YORK (AP) -- U.S. stocks are rising Tuesday, led by airlines still
seeing customers want to fly despite worries about the economy. That's despite
another climb for oil prices because of the war with Iran.
The S&P 500 added 0.7%, coming off its best day since the war began. The Dow
Jones Industrial Average was up 352 points, or 0.8%, as of 10 a.m. Eastern
time, and the Nasdaq composite was 0.7% higher.
It's a break, for now at least, from the usual playbook since the start of
the war, where stock prices have tended to go in the opposite direction of oil
prices. The fear in financial markets has been that a long-term disruption to
the global flow of oil because of the war could send prices so high for so long
that it damages the global economy.
On Tuesday, the price for a barrel of benchmark U.S. crude rose 1.8% to
$95.18. Brent crude, the international standard, climbed 1.4% to $101.63. But
they pared even bigger gains from earlier in the morning, and they're still
below where oil prices were at the end of last week.
Delta Air Lines also offered an encouraging signal about the strength of the
economy after raising its forecast for revenue for the first three months of
2026. It said it's seen demand to fly accelerate into March from both
businesses and households.
Of course, it's also having to pay higher prices for jet fuel because of the
spike in oil prices. But it said the strong demand for flights could
nevertheless allow it to report profit for the start of 2026 that's in line
with its earlier forecast.
Delta's stock flew 5% higher, and it helped other airline stocks trim their
own sharp losses for the year so far. United Airlines climbed 2.8%, and
Southwest Airlines rose 3.4%.
American Airlines gained 3.8% after saying it's also likely to report
stronger growth in revenue for the start of this year than it had forecast
earlier.
Other areas of the market whose profits are closely tied to the economy's
strength were likewise rising. JPMorgan Chase climbed 1.2% and was one of the
strongest forces lifting the S&P 500.
Some beaten-down stocks in the financial industry recovered losses from
earlier in the year, including companies swept up in worries about whether
software businesses and other industries potentially under threat will pay back
all their loans. Blue Owl Capital gained 5%, and Ares Management rose 5.1%.
Another big winner was Uber Technologies, which rose 5.7% after announcing
an expansion of its partnership with Nvidia. They plan to launch a fleet of
autonomous vehicles using Nvidia's technology, beginning with Los Angeles and
San Francisco in the first half of next year.
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, which has helped keep U.S. stock prices near their
record levels.
For all its dramatic swings over the last couple weeks, including several
that struck hour to hour, the S&P 500 is only 3.3% below its all-time high.
That's even as Treasury yields have climbed on expectations that higher oil
prices will keep the Federal Reserve from resuming its cuts to interest rates
for a while. Higher yields push downward on prices for stocks and all kinds of
investments.
The yield on the 10-year Treasury eased to 4.20% from 4.23% late Monday, but
it remains well above the 3.97% level it was at before the war with Iran began.
The Fed will make its next announcement on interest rates Wednesday
afternoon, and traders see virtually no chance of a cut, according to data from
CME Group.
Cuts to interest rates by the Fed would give the economy and job market a
boost, and President Donald Trump has been calling for them angrily. But
reductions would also worsen inflation.
In Australia, the central bank is actually raising interest rates. Citing
higher fuel prices, the Reserve Bank of Australia made its first hike since
November 2023.
In stock markets abroad, European indexes rose following a mixed finish in
Asia. Indexes rose 1% in London and fell 0.9% in Shanghai for two of the
world's bigger moves.
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AP Writers Matt Ott, Elaine Kurtenbach and Rod McGuirk contributed.
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