U.S. stocks swung from losses to small gains on Wednesday following the latest reversal for oil prices, as investors weighed mixed economic data and geopolitical developments. The Dow Jones Industrial Average rose 0.2%, while the S&P 500 and Nasdaq Composite each added 0.3%.
Oil Price Volatility
Crude oil futures initially fell but recovered to trade higher after reports of potential disruptions in supply. West Texas Intermediate crude climbed 1.5% to settle at $78.50 per barrel. The reversal came amid ongoing talks between the U.S. and Iran, which have raised hopes of a nuclear deal that could increase global oil supplies.
Market Movers
Energy stocks led the gains, with Exxon Mobil and Chevron both rising over 1%. Tech stocks also contributed to the rally, as investors bought shares of major companies like Apple and Microsoft. However, financials lagged, dragged down by a decline in bank stocks.
In Canada, the TSX Composite Index edged up 0.1%, driven by gains in energy and materials. The Canadian dollar weakened slightly against the U.S. dollar, trading at 78.5 cents US.
Economic Data
On the economic front, U.S. existing home sales fell 3.4% in April, missing expectations, as high mortgage rates continue to weigh on the housing market. Meanwhile, weekly jobless claims rose to 229,000, indicating a slight softening in the labor market.
Geopolitical Risks
Investors also monitored developments in the Middle East and Europe. In Canada, Alberta Premier Danielle Smith is set to deliver a televised address amid speculation about a potential separation referendum, adding to political uncertainty. Elsewhere, the Canadian military announced the closure of the Nanisivik naval facility in the Arctic, citing operational challenges.
Outlook
Market participants remain cautious ahead of the Federal Reserve's next policy meeting, with many expecting another interest rate hike to combat inflation. Analysts suggest that volatility may persist as investors digest conflicting signals on the economy and corporate earnings.
