S&P 500 Surges as Oil Drops, Dollar Steadies

The S&P 500 jumped sharply on Wednesday as oil prices fell below $100, while the US Dollar steadied early Thursday amid doubts over the ceasefire. The FTSE 100 also climbed, with BP and Shell sliding on weaker crude. Oil rebounded early Thursday as supply concerns persisted, while gold held near recent levels. Airlines and cruise stocks in the US rose strongly, with Carnival posting double-digit gains.

Equities

The FTSE 100 closed 2.5% higher on Wednesday at 10,608.9, reaching its strongest level in over a month as easing tensions between the United States and Iran lifted sentiment. The mid-cap FTSE 250 rose 4.1% on the same day, reflecting a broad-based rebound across UK equities as energy prices fell sharply.

Oil majors led the declines in London. BP fell 5.8% and Shell dropped 4.7% by the close on Wednesday, tracking a steep fall in crude prices. Shell also signalled weaker first-quarter gas production alongside stronger oil trading profits, highlighting mixed operational conditions. In contrast, Gamma Communications surged more than 16% after announcing preliminary takeover discussions, marking one of the sharpest moves in the UK market that day.

Across the Atlantic, US markets rallied strongly on Wednesday following the ceasefire announcement. The S&P 500 closed 2.51% higher at 6,782.83, while the Dow Jones Industrial Average jumped 2.85% and the Nasdaq Composite gained 2.80%. The gains were broad, with industrials leading, while energy stocks fell 3.7% as oil dropped below $100 per barrel.

Travel and leisure shares rebounded sharply. Delta Air Lines closed 3.8% higher on Wednesday despite issuing a weaker quarterly outlook, while Southwest Airlines rose 6.7% and United Airlines climbed 7.9%. Cruise operators also advanced, with Carnival Corporation jumping 11.2% and Norwegian Cruise Line gaining 7.6% by the close.

Retail also delivered strong gains. Levi Strauss rose 10.7% on Wednesday after lifting its full-year sales and profit guidance, signalling improved trading momentum despite recent geopolitical disruption.

Forex & Commodities

The US Dollar held steady after recent losses, with the dollar index at 99.07 as investors weighed the durability of the US-Iran ceasefire. The euro edged lower to $1.166, while the British Pound Sterling ticked slightly higher to $1.339. The Japanese Yen weakened to 158.8 per dollar, reversing part of the previous session’s gains.

Oil markets moved higher early on Thursday as doubts over the ceasefire and continued disruption in the Strait of Hormuz kept supply concerns in focus. Brent crude rose to $96.93 per barrel, while WTI crude traded at $97.41, both rebounding after falling below $100 in the previous session. Shipping delays and security concerns continue to limit flows through the key route, with producers in the Gulf facing ongoing operational risks.

Gold prices were broadly steady early on Thursday, with spot gold at $4,721 per ounce. Prices have fallen sharply since late February as higher energy costs have pushed up inflation expectations, reducing demand for non-yielding assets. Traders are watching whether bullion stabilises within a near-term range as geopolitical risks remain elevated.

Central bank expectations remain in focus following fresh signals from the Federal Reserve. Minutes from its March meeting showed growing support for potential rate increases as policymakers respond to persistent inflation pressures linked to energy markets. Investors are now awaiting US personal consumption data due later on Thursday, which could shape near-term policy expectations.

Attention has also turned to the Bank of Japan, where markets are pricing in the possibility of a rate increase later this month. Policymakers have indicated they will assess developments in the Middle East before making a final decision, while recent data showed Japanese consumer confidence weakening in March.