US stocks fall as crude oil prices climb again because of the war with Iran

NEW YORK (AP) — U.S. stocks are back to falling as oil prices rise further because of the war with Iran, but the moves are less severe than earlier in the week. The S&P 500 fell 0.5% early Thursday, coming off a frenetic start to the week. The Dow Jones Industrial Average dropped 373 points, or 0.8%, and the Nasdaq composite fell 0.4%. Markets seem to be again following the cue of oil prices on worries that a long-term spike could exhaust households’ ability to spend, as well as grind down the global economy and push interest rates higher. A barrel of Brent crude rose 3.3%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Renewed retaliatory strikes from Iran again raised anxiety in U.S. markets Thursday, sending futures lower and energy prices higher with prices at the pump jumping overnight.

Futures for the Dow Jones Industrial Average fell 0.3% before the opening bell, while futures for the S&P 500 future ticked down 0.1%. Nasdaq futures were also off 0.1%.

Uncertainty about the war in the Middle East has been rattling financial markets, with most taking their cues from what the price of oil is doing.

After stabilizing a day earlier, crude prices resumed their climb early Thursday.

“Yesterday’s bounce in risk assets already looks less like a turning point and more like a classic relief rally in a market that briefly inhaled before realizing the room was still on fire,” Stephen Innes of SPI Asset Management said in a commentary.

U.S. benchmark crude jumped by $2.59 per barrel, or 3.5%, to $77.25, the highest level in more than a year. Brent, the international standard, gained 2.8% to $82.87 per barrel.

The rise in oil prices has already sent prices at the pump up close to 10%. One week ago, before the U.S. and Israel attacked Iran, a gallon of regular gas was $2.98, according to auto club AAA. Today, the average price for a gallon in the U.S. is $3.25, a 9% jump.

Investors are worried over how long the war with Iran could last, how high inflation may go because of more expensive oil and how much damage that might do to corporate profits.

The broadening war in Iran will make the Federal Reserve’s job of taming prices more difficult because of the jump in oil prices, which is pushing upward on already high inflation. That could make the central bank less likely to cut benchmark interest rates, meaning that the cost of borrowing money, for businesses and households, would remain higher than was thought even last month.

In equities trading early Thursday, shares of Broadcom jumped more than 6% after the chipmaker’s first quarter profits beat analyst expectations. The company said its AI revenue more than doubled from the same period a year ago, to $8.4 billion.

Elsewhere, in Europe at midday, Germany’s DAX and the CAC 40 in Paris were effectively unchanged, while Britain’s FTSE 100 inched up 0.1%.

In Asian trading, South Korea’s Kospi took back much of its historic losses from a day earlier, jumping 9.6% to 5,583.90. It had gained as much as 12% earlier in the day as investors hunted bargains, triggering temporary trading halts.

The government announced emergency measures for the economy after the benchmark fell by the most ever in a single day on Wednesday. President Lee Jae Myung urged officials to activate an emergency financial package worth 100 trillion won ($68.5 billion) aimed at calming market volatility.

Tokyo’s Nikkei 225 index gave back some early gains, closing 1.9% higher at 55,278.06.

In Hong Kong, the Hang Seng climbed 0.3% to 25,321.34 after Chinese Premier Li Qiang opened the annual session of the National People’s Congress with a report that set the annual target for economic growth this year at 4.5% to 5%. A draft budget put the increase in military spending at 7%, down from 7.2% in recent years.

The government pledged to support the sluggish domestic economy and spur more consumer spending, but did not announce any major new stimulus.

The Shanghai Composite index gained 0.6% to 4,108.57.

In Australia, the S&P/ASX 200 rose 0.4% to 8,940.30, while New Zealand’s benchmark rose 0.6%.

Taiwan’s main share index gained 2.6%.

In currency trading, the U.S. dollar rose to 157.40 Japanese yen from 157.07 yen. The euro fell to $1.1617 from $1.1636.

The dollar has advanced against other currencies partly because the U.S. is viewed as facing less risk from the war than other countries, analysts said.

“When the world becomes less certain, capital gravitates toward the deepest pool of liquidity available,” Innes said, adding that the dollar “remains the market’s preferred storm shelter.”