Stocks recovered sharply on Tuesday and oil prices showed signs of easing, an indication of investors’ renewed hope that an end to the war in Iran was drawing closer.
Talks between Iran and the United States appeared to be proceeding on Tuesday, even after President Trump escalated his threats against Iran over its blockade of the Strait of Hormuz, while Tehran has rejected his demands as unreasonable.
With no details and no assurances yet, the rise in stocks was a further sign of how dependent investors have become on developments in Iran, with even the smallest hint of progress toward a peace deal prompting a sharp response.
Stocks rise in U.S. and Europe but fall in Asia.
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The S&P 500 rose 2.9 percent on Tuesday, reversing a small decline the day before. The sharp rise was the biggest one-day gain for the index since last May.
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In Europe, stocks also posted gains. The Stoxx 600, a broad European index, moved 0.4 percent higher.
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Stocks in Asia, where countries import vast quantities of oil and gas from the Middle East, plunged. The Nikkei 225 in Japan dropped 1.6 percent, and stocks in South Korea fell 4.3 percent.
Oil prices are mixed.
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The price of Brent crude, the global benchmark for oil, rose to around $118 a barrel on Tuesday after settling at $112.78 on Monday.
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The rise was partly affected by the time of the month. Oil largely trades on the futures market, with prices agreed ahead of time for oil traded months later. The Brent crude May contract expires today, and with the immediate high demand for oil, its price remained high. The June price for Brent, which is trading more normally, fell more than 2 percent to around $104 per barrel.
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West Texas Intermediate crude, the U.S. benchmark, fell 1.5 percent to $101.38 per barrel. It settled at $102.88 a barrel on Monday, up 3.3 percent.
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Investors and analysts are focused on the Strait of Hormuz. The narrow waterway between Iran and Oman is a vital trading route for oil and natural gas that normally carries as much as one-fifth of the world’s oil supply.
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The owner of a Kuwaiti tanker loaded with oil said that it had been hit in an Iranian attack near Dubai early Tuesday.
Gas prices rise above $4 a gallon in the U.S.
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U.S. gasoline prices rose again on Tuesday, jumping to a national average of just over $4 a gallon, according to the AAA motor club. The increase has raised the cost for drivers by 35 percent since the war began.
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Gas prices don’t move in lock step with crude, usually trailing increases or decreases by a few days.
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Diesel prices have increased even more quickly and stood at $5.42 on Tuesday, up 44 percent since the start of the war.
The post S&P Surges Nearly 3% Amid Hope for War’s End appeared first on New York Times.
