US markets bounce back as crude oil prices retreat; strong private jobs growth boost tech stocks

The US markets bounced back sharply on Wednesday as investors looked past the West Asia crisis. The NASDAQ advanced over 1.4%, followed by the S&P500 at 0.7% and the Dow Jones by 0.5%.

The situation continues to remain grim between Iran, Israel and the US despite the rumours of negotiations surfacing around. The NYT report stated that Iran’s new Supreme Leader wants to make a deal with the US, following which the crude oil prices fell from the recent highs.

On the other hand, the US markets were also boosted by strong private jobs growth and easing inflation pressures in the services sector. Consequently, tech shares led the rally with Micron and AMD surging over 5.5%, while Amazon surged 3.5%.

Oil prices moderated as trading moved westward from Asia to Europe and across the Atlantic. After briefly topping USD 84 per barrel, the price of Brent crude, the international benchmark, settled at USD 81.40, back to where it was a day earlier. A barrel of benchmark US crude rose 0.1% to USD 74.66.

Stocks also got a boost from signs of strength for the US economy.

One report said growth for US businesses in the real estate, finance and other services industries accelerated last month at the fastest pace since the summer of 2022. Encouragingly for inflation, it also said prices for such businesses are increasing at a slower rate, at least before the war with Iran began.

A second report suggested US employers outside of the government picked up their hiring last month. That could be a hopeful signal for the more comprehensive report coming Friday from the US government about the overall job market.

In financial markets, worries are centred on how long the war with Iran could last, how high inflation will go because of more expensive oil and how much corporate profits will sink because of it.

The US stock market has a history of shaking off military conflicts in the Middle East relatively quickly, though that comes with a caveat that oil prices don't jump too high. That has some professional investors suggesting patience through the volatility, at least when it comes to financial markets.