Financial Markets                      04/02 15:51

   

   NEW YORK (AP) -- Stocks shook off an early stumble to finish with slim gains 
on Wall Street Thursday and close out their first winning week since the start 
of the Iran war.

   The early decline for stocks was driven by a surge in oil prices following a 
national address late Wednesday from President Donald Trump. He vowed the U.S. 
will continue to attack Iran and failed to offer a clear timetable for ending 
the conflict in the Middle East. Oil prices eased slightly during the day, but 
still remain elevated well above $100 per barrel.

   The S&P 500 rose 7.37 points, or 0.1%, to 6,582.69. Several days of solid 
gains this week helped the benchmark index notch a 3.4% gain for the week. 
That's the first weekly gain since the conflict started for index at the heart 
of many 401(k) accounts. Stock markets will be closed for Good Friday.

   The Dow Jones Industrial Average fell 61.07 points, or 0.1%, to 46,504.67. 
The Nasdaq composite rose 38.23 points, or 0.2%, to 21,879.18. Both indexes 
also notched weekly gains.

   A barrel of U.S. crude oil rose 11.3% to $111.54, though prices rose close 
to $114 at one point during the day. The price of Brent crude, the 
international standard, jumped 7.8% to $109.03 per barrel. Crude oil prices 
have been the main force behind the sharp swings for stocks globally. Shipping 
traffic has been severely curtailed in the Strait of Hormuz, where a fifth of 
the world's traded oil passes through during peacetime.

   Crude oil prices had been sliding back toward $100 per barrel prior to 
Trump's address on Wednesday. The U.S. only relies on the Persian Gulf for a 
fraction of the oil it imports, but oil is a commodity and prices are set in a 
global market. A disruption anywhere affects prices everywhere.

   Stocks have been broadly sliding since the war began, with indexes often 
rising and falling sharply along with statements from Trump about the direction 
of the war. Just on Monday, the S&P 500 briefly neared a 10% drop from its 
record, a steep-enough fall that professional investors have a name for it: a 
"correction. The index gained ground Tuesday and Wednesday on hope that the war 
could end soon.

   "For markets, a prolonged conflict increases the risk of sustained pressures 
on inflation, global growth, interest rates, and equity valuations," wrote Adam 
Turnquist, chief technical strategist for LPL Financial, in a note to investors.

   Airlines and other travel-related companies were among the biggest losers on 
Thursday. United Airlines fell 3% and Carnival shed 3.5%.

   Tesla fell 5.4% after a report showing that sales over the past three months 
fell short of analysts' expectations.

   Several big technology stocks gained ground to help counter losses elsewhere 
in the market. Intel jumped 4.9% and Advanced Micro Devices rose 3.5%.

   Treasury yields remained relatively steady in the bond market. The yield on 
the 10-year Treasury fell to to 4.30% from 4.32%.

   Wall Street is worried that higher energy prices are adding to already 
stubbornly high inflation. Rising fuel prices take a bigger chunk out of 
consumers' wallets in several ways. Directly, gasoline prices in the U.S. have 
surged 36 percent from a month ago to average $4.08 per gallon, according to 
the auto club AAA.

   Indirectly, rising fuel prices tend to make a wide range of services and 
goods more expensive. Flights become more expensive as airlines raise ticket 
prices to offset rising fuel costs. Consumer goods become more expensive as 
shipping and transportation costs rise.

   Inflation has been stubbornly above the Federal Reserve's 2% target. The war 
and its corresponding surge in energy prices effectively pushes inflation 
higher and that has dashed hopes for the Fed to cut interest rates. Wall Street 
had hoped for the central bank to cut rates in order to help offset a weakening 
job market. Lower interest rates could help stimulate the economy by lowering 
borrowing costs, but they also risk worsening inflation.

   Traders came into 2026 forecasting several cuts to the Fed's benchmark 
interest rate, which influences rates for mortgages and other loans. They are 
now expecting the benchmark rate to remain steady this year.

   The war has also caused an anomaly of sorts in the oil market. Brent crude 
oil futures are typically priced higher than those for U.S. crude oil, but the 
war flipped that on its head. Because of the supply constraints, the sooner a 
buyer needs a barrel of oil, the more they'll have to pay. Right now, the most 
actively traded futures contract for U.S. crude oil is for delivery in May, 
while the Brent futures contract is for delivery in June. That shorter 
timeframe is why U.S. crude is trading for more than Brent.

   Tom Kloza, chief energy adviser at Gulf Oil, points out that a buyer who 
needs oil immediately will pay about $3 to $5 a barrel above the futures price 
for U.S. crude and an even steeper premium for Brent.

   ___

   Associated Press journalists Chan Ho-Him and Matt Ott contributed to this 
report.

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