Oil stocks like Exxon (XOM) jumped higher today as the Middle East conflict intensified.
Oil prices Wednesday paused their recent surge, supporting a rebound in European and US stocks, as investors hold hope for limited long-term disruptions to energy markets and monitor developments in the Middle East.
Global investors are digesting the market turmoil spurred by the US-Israeli war with Iran and subsequent conflict across the region. Asian stocks sank Wednesday, while European and US stocks gained after two days of intense volatility.
Oil prices steadied, easing pressure on stocks, after the New York Times reported that Iran made indirect contact with the United States to discuss negotiations to end the conflict. Europe’s Stoxx 600 gained 1.37% Wednesday, halting a two-day slide. The index is still down 3.3% this week.
Separately, Treasury Secretary Scott Bessent on Wednesday confirmed to CNBC that the United States Navy is set to provide “safe passage” for oil tankers through the crucial Strait of Hormuz “when it is appropriate and should it be needed,” reinforcing comments made by President Donald Trump on Tuesday that helped oil prices moderate and boosted stocks.
To some investors, markets remain complacent.
“There are still some real risks out there for investors…given that the stock market is pricing in the best-case scenario outcome right now,” Matt Maley, chief market strategist at Miller Tabak + Co, said in a note.
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