Stan Choe, Elaine Kurtenbach, Bernard Condon, AP Business Writer
NEW YORK (AP) – The invasion with Iran, destroying a bunker into Israeli war, has not upset oil and stock market prices on Monday, at least for now. The hope is that Iran will not retaliate in ways that disrupt the rough currents that hurt the economy around the world.
The S&P 500 came out of a week when stock prices went up and down due to concerns about a potential escalation in the conflict. The Dow Jones industrial average rose 83 points (0.2%) as of 10:45am Eastern time, with the Nasdaq Composite rising 0.6%.
Oil prices rose 4% shortly after trading began on Sunday night, but were quickly turned back as the focus shifted from what the US military did to how Iran would react.
By Monday morning, the price of US oil benchmark barrels had dropped by 0.9% at $73.15. International standard Brent crude plunged 1.1% per barrel to $76.15. They are still on top of where they were before the battle began over a week ago.
The overall fear was that aggravated war could narrow the world’s oil supply. Not only is Iran the leading producer of crude oil, it can also try to block access to the Strait of Hormuz off the coast.
The calm in the oil market came as several analysts said it was likely that Iran would not close the waterway. Iran uses the straits to move its own crude oil primarily to China, requiring the revenues it generates from selling oil.
“It’s the potential for a burnt earth, the movement of Sherman Burning Atlanta,” said Tom Croza, chief market analyst at Turner Mason & Company.
Neil Newman, managing director of Atris Advisory Japan, said that the Israeli-Iran war was a brief conflict, with “one big hit by Americans being effective and you can return to business as usual.
When asked about the conflict during Beijing’s daily briefing, Guo Zi-Kun, a spokesman for China’s Foreign Ministry, told reporters: “China continues to play a constructive role in encouraging de-escalation by strengthening communication with Iran and related parties.”
Of course, not everyone is sure of Iran’s next move.
Andy Lipou, a Houston analyst who has covered the oil market for 45 years, said the country is not always a reasonable actor and that he wouldn’t be surprised if Tehran assaulted him for political or emotional reasons.
“If the Strait of Hormuz is completely closed, oil prices will rise from $120 to $130 per barrel,” Lipou said.
“That means the price of all goods transported by truck is higher, making it more difficult for the Fed to lower interest rates.”
The Federal Reserve is hesitant to lower interest rates and is waiting to see how much of President Donald Trump’s tariffs hurt the economy and raise inflation, which has been put on hold this year after cutting late last year.
Although inflation has remained relatively tame lately, the continuing rise in oil and gasoline prices puts upward pressure on it. That means the Fed can be held on hold as interest rate cuts can boost the economy and increase inflation.
Monday’s preliminary report suggests tariffs are pushing prices for U.S. businesses. Data from the survey “confirms speculation that the Fed has been on hold for some time,” according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
In the bond market, the Treasury Department has eased as hopes continue that the Fed could potentially cut interest rates later this year.
Treasury yields fell to 4.32% from 4.38% on Friday. The two-year financial yield, which tracks the Fed’s expectations more closely, fell from 3.90% to 3.84%.
On Wall Street, Elon Musk’s Tesla was the only powerful force to push the S&P 500 high after jumping 10.1%. On Sunday, the electric vehicle company began a test run for a small team of self-driving taxis in Austin, Texas.
Hims & Hers Health fell 30.3% after Novo Nordisk said he wouldn’t work with the company to sell the popular Wegovy obesity drugs. Shares of Novo Nordisk, trading in the US, fell 5.7%.
In overseas stock markets, indexes fell modestly across Europe after mixing in Asia. France’s CAC 40 fell 0.6%, while Hong Kong’s Hangsen rose 0.7% in two major global moves.
Kurtenbach contributed from Bangkok. Tokyo’s AP video journalist Mayuko Ono and Washington’s AP business writer Matt Ott contributed.
Original issue: June 23, 2025 9:32am EDT
