US markets fall and oil prices jump after Trump says ceasefire with Iran is 'over'
NEW YORK (AP) — Oil prices are rising, and stock markets are falling worldwide after President Donald Trump raised doubts about the temporary truce in the war with Iran. The S&P 500 fell 0.6% early Wednesday after Trump said the agreement to pause fighting was “over,” though he added that he would allow negotiations to continue. The Dow Jones Industrial Average lost 545 points, or 1%, and the Nasdaq composite was down 0.3%. The action was stronger in the oil market, where the price for a barrel of Brent crude climbed 5.2% to $77.97 after briefly topping $79 earlier. Treasury yields ticked higher.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. stock futures slid lower and oil prices surged more than 5% after President Donald Trump said Wednesday that the interim agreement with Iran is over, though he will allow talks to continue.
Futures for the S&P 500 were down 0.7% before the opening bell, while futures for the Dow Jones Industrial Average slid 1%. Nasdaq futures were off 1.1%.
Trump made the comments following U.S. strikes on Iran that were a retaliation for attacks on three ships in the Strait of Hormuz. The price of Brent crude, the international standard, jumped $3.94 to $78.10 a barrel. U.S. benchmark crude surged $3.60 to $74.04 a barrel.
“For me, I think it’s over,” Trump responded when asked about the status of the ceasefire. “It’s just a waste of time dealing with them,” he said on the sidelines of the two-day NATO summit in Ankara, Turkey.
Iran and the United States agreed as part of their interim deal on ending the war to allow ships to pass through the strait without paying charges for 60 days. But Tehran has insisted it must control the vessels’ routes and vowed to later charge fees for passage. That would upend decades of practice in the waterway.
Crude prices had declined recently from spikes well above $100 a barrel to around the levels they were at before the war with Iran began in late February. A barrel of crude is now trading at levels last seen on June 22, before the U.S. and Iran established a 60-day negotiating timeline that was intended to suspend hostilities.
For months the Iran conflict had pushed oil prices higher and stoked uncertainty for consumers and businesses alike, with most of the concern centered around how much it would affect broader inflation.
That's coincided with worries that the craze for artificial intelligence-related shares has pushed prices past the amount of gains in productivity and profits businesses are hoping to get from their massive investments in computer chips and data centers.
“As such, geopolitical headlines will likely determine market sentiment over the coming hours. A further deterioration in the situation could weigh further on equity valuations along with rising stress in technology,” Ipek Ozkardeskaya of Swissquote said in a commentary.
As usual, the spike in oil prices lifted the stocks of major energy producers while dragging down companies whose main business relies on oil and gas.
Exxon Mobil, ConocoPhillips and Chevron all rose close to 2% in premarket, while Delta, United and American and other airline shares fell between 2% and 4%.
Big Tech lost some ground early Wednesday after Apple lost its attempt to overturn a European Union ruling that designated it as an online “gatekeeper” subject to the strictest requirements of the 27-nation EU’s Digital Markets Act.
The European Commission defines gatekeepers as conduits between businesses and consumers that provide “core platform services.” Those services include Google’s Chrome browser, Microsoft’s Windows operating systems, Apple's App Store and texting apps like Meta’s WhatsApp.
Apple shares were stable, but shares of most other tech companies — including Google parent Alphabet, Meta, Microsoft and Amazon — all fell more than 1%.
Elsewhere, in Europe at midday, Germany's DAX shed 1.9% and the CAC 40 in Paris gave up 1.8%. Britain's FTSE 100 slid 1.1%.
In Asia, Tokyo's Nikkei 225 lost 2.1% to 66,819.05, while the Kospi in South Korea shed 5.4%, to 7,246.79.
The South Korean index has soared and then fallen back, briefly surpassing the 9,000 level last month and then succumbing to bouts of heavy selling of big AI-related tech shares like Samsung Electronics and SK Hynix. Samsung fell 6.3% early Wednesday after dropping about 7% the day before. SK Hynix shed early gains to drop 5.7%.
Taiwan's Taiex rose 0.6%.
In Hong Kong, the Hang Seng rose 3% to 24,199.46.
Hong Kong traded shares of Chinese AI model startup Zhipu, known also as Z.ai and traded as Knowledge Atlas Technology, rose 13.4% on Wednesday.
A six-month lock-up period for “cornerstone” investors after its $558 million trading debut in Hong Kong in early January expires this week. State-owned China National Radio reported late Tuesday that nearly 70% of Zhipu’s cornerstone investors are committed to stay on, despite previous worries that the lock up period expiration could trigger a sell-off of shares. Zhipu’s share price has risen more than 1,300% since its January trading debut in Hong Kong.
The Shanghai Composite index declined 0.5% to 3,970.88.
Elsewhere in Asia, Australia's S&P/ASX 200 shed 0.2% to 8,785.10, while India's Sensex lost 0.7%.
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AP Business Writer Chan Ho-him in Hong Kong contributed to this report.
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