After two days of volatile swings, stock markets gained ground on Wednesday as the rise in oil prices eased.
“Today has been certainly much calmer than Monday and Tuesday were, so that’s coming as some relief,” said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management.
“I think that’s not a reflection of stability as much as differences in opinions on whether we are entering a protracted Middle East conflict or something shorter term.”
Uncertainty about the U.S.-Iran conflict has sent prices in financial markets careening up and down this week, with most taking their cues from what the price of oil is doing.
The April crude oil contract was up 10 cents US at US$74.66 per barrel.
“Looking at today’s move in crude, we’re in very much the mid-US$70s range, which is up almost US$10 week-over-week,” Burkett said.
In financial markets, worries are centred 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 S&P/TSX composite index was up 157.92 points at 33,942.86.
In New York, the Dow Jones industrial average was up 238.14 points at 48,739.41. The S&P 500 index was up 52.87 points at 6,869.50, while the Nasdaq composite was up 290.79 points at 22,807.48.
The U.S. stock market has a history of shaking off military conflicts in the Middle East relatively quickly, though that comes with the caveat that oil prices don’t jump too high.
Big tech stocks, meanwhile, were the strongest forces lifting the market. Amazon rose 3.9%, and Nvidia added 1.7%. Because they’re among the biggest stocks in the U.S. market in terms of total value, their movements carry more weight on the S&P 500.
Stocks also got a boost from signs of strength 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 overall job market.
In the Canadian stock market, much of the gains were coming from the technology sector. That part of the market was led by Shopify Inc., which gained 6.1% on the day.
“The fate of Canadian tech is pretty much in the hands of Shopify. So on a good day for Canadian tech, it typically has to be a good day for Shopify,” he said.
The Canadian dollar traded for 73.19 cents US compared with 73.08 cents US on Tuesday.
The April gold contract was up US$11.00 at US$5,134.70 an ounce.
— With files from The Associated Press