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NEW YORK (AP) — Oil prices are edging closer to the $100 per barrel mark, while global stock markets are pulling back after significant gains from the previous day. Early Thursday trading saw the S&P 500 dip by 0.1% as tensions simmered between the United States, Iran, and Israel over the specifics of a two-week ceasefire. This truce had initially propelled markets upward on Wednesday. Meanwhile, the Dow Jones Industrial Average dropped 197 points, and the Nasdaq composite experienced a minor decline of less than 0.1%. In energy markets, U.S. crude oil surged 5.8% to reach $99.86 a barrel, spurred by reports from Iran’s semiofficial news outlets suggesting the strategic Strait of Hormuz may have been mined.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Thursday morning saw oil prices on the rise and Wall Street facing slight losses, amid doubts over the stability and clarity of a ceasefire agreement between the U.S. and Iran.
Futures for the S&P 500 and Nasdaq both declined by 0.4% ahead of the market opening, while the Dow Jones Industrial Average futures fell by 0.5%.
These downturns occurred just a day after all three indices had seen gains ranging from 2.5% to 3%, following U.S. President Donald Trump’s announcement of a temporary two-week ceasefire with Iran on Tuesday night.
Doubts about the durability of the ceasefire arose just hours after the announcement as a round of intense Israeli strikes on Lebanon killed and injured hundreds. Iran again closed the Strait of Hormuz in response to the attacks in Lebanon.
That sent oil prices climbing back toward $100 a barrel Thursday, reversing an earlier plunge on optimism over the temporary ceasefire agreement. Benchmark U.S. crude was 5.4% higher on Thursday at $99.44 a barrel. Brent crude, the international standard, rose 4.1% to $98.70 per barrel.
Uncertainties over global energy supply remained. The Strait of Hormuz, a chokepoint for energy transport where a fifth of the world’s oil typically passes, was largely closed even though the U.S. repeatedly demanded that it must be reopened.
“(Oil) prices rebounded as fighting in the Middle East continued, and the ceasefire outlook deteriorated, keeping uncertainty around the Strait of Hormuz firmly in focus,” ING Bank analysts Ewa Manthey and Warren Patterson wrote in a note Thursday.
Talks to pursue a permanent end to the war could start in Pakistan on Saturday, and Vice President JD Vance is expected to lead the U.S. delegation. Trump posted on his Truth Social media platform that U.S. military will remain in the region “until such time as the REAL AGREEMENT reached is fully complied with.”
Elsewhere, at midday in Europe, Britain’s FTSE 100 fell 0.3%, France’s CAC 40 dropped 0.9% and Germany’s DAX lost 1.3%.
Asian shares closed mostly lower. Tokyo’s Nikkei 225 dropped 0.7% to 55,895.32, while South Korea’s Kospi lost 1.6% to 5,778.01. Hong Kong’s Hang Seng fell 0.5% to 25,752.40. The Shanghai Composite index was down 0.7% to 3,966.17. Australia’s S&P/ASX 200 edged up 0.2% to 8,973.20. Taiwan’s Taiex was 0.3% higher, while India’s Sensex dropped 1.6%.
The U.S. dollar rose to 158.98 Japanese yen from 158.57 yen. The euro was trading at $1.1681, up from $1.1663.
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Associated Press writer Aniruddha Ghosal contributed to this report.