US stocks rebound after strong economic updates and an easing of oil prices

NEW YORK (AP) — The U.S. stock market is rebounding Wednesday from two days of punishing swings after oil prices stopped spiking and reports gave encouraging updates on the economy.

The S&P 500 rose 0.8% in midday trading and is on track to claw back most of its loss since the war with Iran began. The Dow Jones Industrial Average was up 301 points, or 0.6%, as of noon Eastern time, and the Nasdaq composite was 1.3% higher.

The strength followed a scary start to Wednesday, when South Korea’s Kospi stock index plunged 12.1% for its worst day in history. Uncertainty about the war has sent prices in financial markets careening up and down hour by hour this week, with most taking their cues from what the price of oil is doing.

Oil prices moderated as trading moved westward from Seoul and the rest of Asia to Europe and across the Atlantic. After briefly topping $84 per barrel, the price for a barrel of Brent crude, the international standard, eased back to $80.88, a dip of 0.6%. A barrel of benchmark U.S. crude fell 0.6% to $74.14.

Stocks also got a boost from increased hopes for the U.S. economy.

One report said growth for U.S. businesses in the real estate, finance and other services industries accelerated last month at the fastest pace since the summer of 2022. Encouragingly for inflation, it also said prices for such businesses are increasing at a slower rate, at least before the war with Iran began.

A second report suggested U.S. employers outside of the government picked up their hiring last month. That could be a hopeful signal for the more comprehensive report coming Friday from the U.S. government about the strength of the job market.

In financial markets, worries are centered on how long the war with Iran could last, how high inflation will go because of more expensive oil and how much corporate profits will sink because of it.

The U.S. stock market has a history of shaking off military conflicts in the Middle East relatively quickly, though that comes with a caveat that oil prices don’t jump too high. That has some professional investors suggesting patience through the volatility, at least when it comes to financial markets.

Not everyone is optimistic.

“I think the Iran situation is getting out of hand, and I think that U.S. President Donald Trump miscalculated enormously,” said Francis Lun, CEO of Venturesmart Asia. “The situation is very grim.”

On Wall Street, a mix of companies helped drive Wednesday's rise.

Stocks enmeshed in the crypto industry climbed as bitcoin's price rebounded back above $73,000. Coinbase Global jumped 15.3%, and Robinhood Markets rallied 7.8%.

Retailers and travel companies strengthened with hopes that a solid economy and an easing for jumps in gasoline prices will mean their customers may have more to spend.