Oil prices rise 3%, U.S. stocks drift in mixed trading

NEW YORK — The U.S. stock market is drifting in mixed trading Wednesday, while oil prices climb another three per cent as fighting continues in the war with Iran.

The S&P 500 was virtually unchanged, coming off its best day in three weeks, after swinging between modest losses and gains at the start of trading. The Dow Jones Industrial Average was up 175 points, or 0.3 per cent, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.4 per cent lower.

The majority of stocks in the S&P 500 was rising after more companies reported strong profits for the spring. Expectations are high generally, and companies will need to match them after their stock prices already neared records on anticipation for them.

Philip Morris International rose 3.2 per cent after the seller of Marlboro cigarettes reported stronger profit and revenue for the latest quarter than expected. Its shipments of smoke-free products rose 7.5 per cent.

AT&T climbed 3.6 per cent after reporting a stronger profit than analysts expected. CEO John Stankey also said the telecom is accelerating plans to send roughly US$10 billion to its shareholders this year through the buybacks of its stock.

Super Micro Computer soared 21.4 per cent after the seller of AI servers said it expects to report stronger profit margins for the latest quarter than it had earlier forecast. It, though, also said that revenue will likely come in at the low end of its forecasted range of US$11 billion to US$12.5 billion.

They helped offset a 7.3 per cent drop for GE Vernova, which reported a weaker profit for the latest quarter than analysts expected.

Alphabet ticked 0.3 per cent higher ahead of its earnings report, which is scheduled to arrive after trading ends for the day. Anticipation is high, and not just because the parent company of Google is one of the largest stocks on Wall Street. It’s also one of the biggest spenders on artificial-intelligence technology.

Investors are looking for signs that all the billions of dollars going into processors, computer memory and other building blocks of the AI boom are producing the kinds of productivity and profits that would make the investments worth if. If that isn’t the case, stocks of chip companies and other AI winners would look very expensive following their rushes higher.

Such worries have kept AI stocks at the center of Wall Street’s swings for weeks.

Micron Technology swung between a loss of 3.6 per cent and a gain of 0.8 per cent Wednesday morning. That’s after it jumped 14.4 per cent in the first two days of this week to reclaim nearly all its 13.3 per cent plunge from the week before. It’s still up roughly 240 per cent for the year so far.

Stocks broadly also felt pressure from continuing climbs for oil prices, which raise costs for most businesses and eat at their profits.

The price for a barrel of Brent crude oil, the international standard, rose 3.1 per cent to US$93.83. That’s up from less than US$72 early this month, which is roughly where it was before the war with Iran. Early Wednesday morning, it briefly topped US$95 per barrel to touch its highest price in nearly six weeks.

Rising oil prices are threatening a reacceleration of inflation, just as increases for prices were slowing more than economists expected. That in turn could push the Federal Reserve and other central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments.

The yield on the 10-year Treasury rose to 4.65 per cent from 4.63 per cent late Tuesday and from just 3.97 per cent before the war with Iran began. It’s already helped bring long-term U.S. mortgage rates to their highest levels in nearly a year.

Oil prices have climbed as fighting across the Middle East keeps oil tankers from using the Strait of Hormuz to exit the Persian Gulf and delivering to customers. Normally, a fifth of all oil and natural gas traded in peacetime passes through the narrow strait.

The auto club AAA said Wednesday that the average price for a gallon of regular gas in the U.S. jumped again overnight to US$4.06. That’s still below highs of around US$4.56 per gallon in May, but it had been below US$3 before the United States and Israel attacked Iran in late February.

In stock markets abroad, indexes climbed in Europe following a mixed session in Asia.

London’s FTSE 100 rose 1.6 per cent, while Hong Kong’s Hang Seng fell one per cent for two of the world’s bigger moves.

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Stan Choe, The Associated Press

AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.