Wall Street ticks up modestly as investors await a major release of oil reserves

NEW YORK (AP) — The U.S. stock market is remaining relatively calm on Wednesday, even as the price of oil continues to swing.

The S&P 500 edged down 0.1% and could be headed for another day of relatively modest moves following a wild stretch caused by the war with Iran’s effects on oil prices. The Dow Jones Industrial Average was down 339 points, or 0.7%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Since the start of the war, sharp moves for oil prices have cascaded through financial markets worldwide and caused big swings up and down, sometimes by the hour. Oil prices briefly spiked to their highest levels since 2022 this week because of the possibility that production in the Middle East could be blocked for a long time, which in turn raised worries about a surge of debilitating inflation for the global economy.

The International Energy Agency said Wednesday that its members will release 400 million barrels of oil from stockpiles they’ve set aside for emergencies. Such moves push downward on oil prices in the near term, but it’s likely that only a full resumption of the flow of oil and natural gas from the Persian Gulf area would fully ease the market. That has investors worldwide anxiously awaiting the end of the war.

The price for a barrel of Brent crude, the international standard, rose 3% to $90.38. A barrel of benchmark U.S. crude gained 3.7% to $86.53 after briefly dropping toward $82.

Worries are centered on the Strait of Hormuz, a narrow waterway off Iran’s coast where a fifth of the world’s oil sails on a typical day. The war has halted most of that traffic, which means storage tanks for crude in the region are filling up because the oil has nowhere else to go. That in turn is pushing oil producers to say they’re cutting their output.

The United States said it took out more than a dozen minelaying Iranian vessels Tuesday, and the Islamic Republic vowed to block the region’s oil exports, saying it would not allow “even a single liter” to be shipped to its enemies.

All this is happening at a time when inflation was already higher in the United States than anyone would like. A report released Wednesday showed that U.S. consumers paid prices for groceries, gasoline and other costs of living that were 2.4% higher in February than a year earlier.

To be sure, that inflation figure was the same as the prior month’s and better than the 2.5% that economists expected, but it remains above the 2% target the Federal Reserve has set for the economy. It also doesn’t include the spike in gasoline prices that’s happened this month because of the war.

“Looking forward, we expect a spring bulge in inflation due to the spike in energy prices tied to the Iran war, the duration of which will dictate the landing spot for headline inflation by year end,” according to Gary Schlossberg, global strategist at Wells Fargo Investment Institute.

High inflation combined with a stagnating economy would create a worst-case scenario called “stagflation” that the Federal Reserve has no good tools to fix. Stagflation fears are rising not just because of higher oil prices but also because of weakness in hiring by U.S. employers.

On Wall Street, Oracle jumped 12.4% to one of the market’s biggest gains. The tech giant reported stronger profit and revenue for the latest quarter than analysts expected. It also raised its forecast for revenue growth next fiscal year, in part because of demand for cloud computing for artificial-intelligence training and inferencing.

Campbell’s sank 8.2% after the soup company reported a weaker profit for the latest quarter than expected. It was hurt by struggles for its snack business, and it cut its forecasts for revenue and profit this fiscal year.

In stock markets abroad, indexes fell in Europe following better performances in Asia. Germany’s DAX lost 1.1%, while Japan’s Nikkei 225 rose 1.4%.

In the bond market, Treasury yields rose because of the upward pressure from climbing oil prices. The yield on the 10-year Treasury climbed to 4.19% from 4.15% late Tuesday.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.