Oil prices climb back toward $100, and US stocks halt their record-breaking rally
Posted/updated on: June 3, 2026 at 4:06 pm
NEW YORK (AP) — Oil prices rose Wednesday following the latest flare-up in fighting to threaten the U.S.-Iran ceasefire, and U.S. stocks retreated from their records.
The S&P 500 fell 0.7% from its all-time high for its first drop in 10 days. The Dow Jones Industrial Average dropped 620 points, or 1.2%, and the Nasdaq composite sank 0.9%.
Weighing on the market was a climb of 1.9% for the price of a barrel of Brent crude oil, the international standard, which brought it back to $97.81. It rose after both the United States and Iran said they launched retaliations for earlier attacks or attempted ones.
Palo Alto Networks helped drag the market lower, and it fell 5.6% even though it reported profit for the latest quarter that topped analysts’ expectations. Investors may have been looking for even more after its stock came into the day with a surge of 61.3% for the year so far, more than quintuple the S&P 500’s already big 11.2% rise.
Stocks also felt pressure from higher yields in the bond market, which climbed with the price of oil. The yield on the 10-year Treasury rose to 4.49% from 4.46% late Tuesday and from just 3.97% before the war began.
High yields worldwide are threatening to slow economies and undercut prices for stocks and all kinds of other investments. They have already forced the average long-term U.S. mortgage rate to its most expensive level in nine months, and they could curtail companies’ borrowing to build the artificial-intelligence data centers that have supported the U.S. economy’s growth recently.
More expensive loans can hurt smaller companies in particular because many need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks fell 1.3%, more than the rest of the market.
Reports released Wednesday on the U.S. economy came in mixed. One from the Institute for Supply Management said growth accelerated more last month for U.S. construction, agricultural and other services businesses than economists expected.
That’s an encouraging signal, but the survey also showed businesses are feeling the pinch of higher prices caused by tariffs and more expensive oil. “This is the definition of inflationary pressure starting to affect us,” one company in the accommodation and food services industry said in the survey.
Still, stocks remain near their records, even with all the pressure on the global economy created by higher inflation.
Oil prices remain below their peaks from earlier in the war with Iran, and hope seems to be remaining on Wall Street that the United States and Iran will ultimately agree to reopen the Strait of Hormuz to oil tankers. That would improve the global flow of crude and hopefully lower its price.
Such hopes, along with strong profit reports from U.S. companies, helped launch the S&P 500 on its nine-day winning streak that ended Wednesday, one day shy of its longest in three decades.
Medtronic climbed 5.7% after reporting a stronger profit for the latest quarter than analysts expected. It also increased its dividend payout going to investors.
GameStop rose 6% after the video-game retailer said its revenue in the latest quarter grew 14% from a year earlier. It also announced a program to send up to $2 billion to its investors by buying back its own stock.
Macy’s added 0.6% after swinging between gains and losses through the day. The retailer reported profit for the latest quarter that blew past analysts’ forecasts, while saying an overhaul of its merchandise and better customer service is resonating with customers.
All told, the S&P 500 fell 56.10 points to 7,553.68. The Dow Jones Industrial Average dropped 620.72 to 50,687.07, and the Nasdaq composite sank 239.93 to 26,853.98.
In stock markets abroad, European indexes fell following a mixed finish in Asia.
Hong Kong’s Hang Seng dropped 1.6%, but Japan’s Nikkei 225 jumped 2.5% to another record.
Excitement around the boom created by AI technology has been a huge engine for stock markets worldwide. On Wall Street, Marvell Technology rose another 3.7% following its best day on record, a surge of 32.5%, after Nvidia CEO Jensen Huang suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.”
The last company to enter the expanding club of behemoths was Micron Technology, which is likewise riding the AI wave.
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