U.S. stocks rose Wednesday and global oil prices fell in yet another volatile trading session, as traders and investors were buffeted by constant headlines about the war in Iran.
On Tuesday night, reports surfaced that the U.S. had sent Iran a 15-point peace plan, which sparked hopes that the Trump administration was moving to end its monthlong war against Iran. Two regional sources and a U.S. official confirmed to NBC News on Wednesday that the plan had been sent.
Initially, S&P 500 and Nasdaq 100 futures rose more than 1%.
On Wednesday morning however, unconfirmed reports from Iranian media, which cited an anonymous source, said that Tehran would not accept a ceasefire or hold talks with the United States. The reports briefly knocked index futures off their pre-market highs and lifted oil prices off their early morning lows.
Despite the apparent setback, stocks opened the trading day higher. The S&P 500 index rose about 1%, the Nasdaq Composite rose 1.2% and the Dow jumped 575 points. The Russell 2000 rose about 0.5%.
The price of U.S. crude oil tumbled more than 4% in morning trading to about $88 per barrel. West Texas Intermediate, or WTI, crude oil has soared more than 30% since the start of the war on Feb. 28. The cost per barrel is up 50% since the beginning of the year.
International Brent crude prices also fell Wednesday to around $100 per barrel.
“Just one headline has the potential to send oil prices and Treasury yields meaningfully higher or lower,” analysts at Citi wrote on Wednesday, describing the current state of the stock market.
Pakistan has offered to mediate talks to end the fighting, four sources told NBC News. A Gulf official said Pakistan had been passing messages between the two countries for the past two days.
An in-person meeting between the U.S. and Iran could be held in the coming days, two sources added.
But President Donald Trump has continued to give conflicting signals.
On March 16, Trump said he was delaying his scheduled visit to China “by a month or so” to monitor the war. On March 23, Trump said that the Strait of Hormuz would be “open very soon.”
And on Tuesday, Trump declared, “This war has been won,” while speaking to reporters in the Oval Office. At the same time, the U.S. is sending more than 1,000 additional troops to the Middle East, sources told NBC News.
Since the war started, the market has seen moments like this before though with markets getting whipsawed by constant back-and-forth comments.
“Uncertainty remains high,” analysts at ING wrote in a note on Wednesday morning. “Overall, volatility remains elevated and a geopolitical risk premium persists.”
They added that the “ongoing tensions continue to support higher prices, stoke inflation concerns” and will likely cause central banks to remain on hold, rather than cut rates. In Europe though, traders believe the European Central Bank and Bank of England will have to go so far as raising rates.
“Markets desperately want to believe in the positive,” wrote UBS Global Wealth Management chief economist Paul Donovan. “Focus on the apparent 15-point US plan to end the war has received more attention than Iranian dismissals of this, or the fact that passage through the Strait of Hormuz is minimal.”
But in the 17 trading sessions since the war began, U.S. oil prices have closed down only 4 times so far. Likewise, over that same time period, the S&P 500 has closed higher only 6 times. 3 of those higher closes were only fractional.
Before Wednesday’s opening bell, the S&P 500 and Nasdaq Composite were set to record their worst months in a year. The Dow is set to post its worth month since September 2022.
The Nasdaq was down more than 6% for the year, while the S&P 500 was on tracking a 4% loss for the year so far. The majority of those losses have come since the war began.
Meanwhile, the Strait of Hormuz, through which 20% of the world’s oil supply normally passes, has remained at a near standstill since the war began.
On Monday, just five total ships passed through the Strait, according to data compiled by S&P Global Market Intelligence. On Tuesday, the total was only six. On many days since the war started not a single ship has passed through.
However, some of the few ships passing through the strait have taken an unusual course close to the Iranian coastline, potentially signaling that Tehran is keeping a tight grip on traffic flows. Two specific Indian ships on Tuesday were granted passage after a deal with Iran, Bloomberg News reported. The Iranian Navy also guided the ships.
Otherwise, hundreds of other ships loaded up with cargo, oil and liquified natural gas, remain stuck.
