Oil price swings and global market turbulence as Iran war fears grip investors

NEW YORK (AP) — Oil prices and stock markets around the world had a shaky Monday as uncertainty over the Iran war rattled investors. The S&P 500 swung between gains and losses, closing down 0.1%. It was the index's second loss since hitting an all-time high last week.

The Dow Jones Industrial Average added 159 points, or 0.3%. The Nasdaq composite fell 0.5%. Both indexes also yo-yoed during the session.

Stock prices moved in the opposite direction of oil prices. Oil has been twitchy because of uncertainty about how long the Iran war will keep the Strait of Hormuz closed, preventing tankers from delivering crude. Brent crude, the international benchmark, hit $112 a barrel overnight before falling below $107 in the morning. It later turned higher and settled at $112.10. After President Donald Trump said late in the day that he would hold off on a planned military attack on Iran, at the request of regional allies, Brent fell back below $109. The move kept hopes alive that a deal to reopen the Strait of Hormuz may still be possible.

The swings in oil prices have made bond markets the center of action recently. Climbing bond yields have increased pressure on economies and stock markets worldwide. Higher yields make it more expensive for households and businesses to borrow. U.S. homebuyers are feeling this through higher mortgage rates. Higher rates also make it harder for companies to borrow for projects like building data centers for artificial intelligence, which has been driving much of the U.S. economy's growth.

In the bond market, the yield on the 10-year U.S. Treasury hit 4.63% before falling back to 4.59%, where it was late Friday. The yield on the 10-year Japanese government bond rallied toward its highest level since the late 1990s. Yields worldwide have been climbing on fears that higher oil prices will cause higher inflation. This could push central banks not only to abandon plans for cutting interest rates but also to consider hiking them. Higher rates would slow inflation but could hurt the economy and drag down stock prices and other investments.

Several solid reports on the U.S. economy, along with worries about the U.S. government's huge and growing debt problem, are also pushing yields higher. On Wall Street, Regeneron Pharmaceuticals dropped 9.8% to help lead the U.S. stock market lower after reporting discouraging data.