Stocks hit record highs as oil markets swing

U.S. stock markets climbed to new record highs this week, even as global oil markets experienced sharp fluctuations tied to escalating tensions surrounding the war with Iran.

While investors on Wall Street appeared largely unfazed, oil prices surged earlier in the week amid concerns that the conflict could disrupt global supply chains. Prices later retreated, easing some pressure on broader financial markets.

The volatility stems from significant geopolitical developments. Iran has closed the Strait of Hormuz — a critical passage for global oil shipments — while a U.S. Navy blockade has limited Iran’s ability to export crude. Together, these actions have heightened fears of sustained supply disruptions, keeping oil prices well above the roughly $70 levels seen before the conflict.

Despite those concerns, equity markets remained resilient, supported in part by strong corporate earnings. Shares of Caterpillar, Eli Lilly, and Royal Caribbean each jumped more than 8 percent on Thursday after exceeding profit expectations. Analysts note that stock performance often tracks earnings trends over time, reinforcing investor confidence.

However, not all companies saw gains. Meta Platforms dropped 9.4 percent despite posting better-than-expected results, as investors reacted to plans for significantly higher spending on data centers and artificial intelligence, with projected investments ranging from $125 billion to $145 billion.

Microsoft shares fell 4.9 percent after also raising its capital expenditure outlook, though analysts pointed to continued strength in its Azure cloud business. Amazon declined 1.6 percent despite beating earnings forecasts.

In fixed-income markets, Treasury yields edged lower as oil prices pulled back and economic data pointed to slower growth. The yield on the 10-year Treasury slipped to 4.38 percent, down from 4.42 percent late Thursday.

Recent economic indicators presented a mixed picture. U.S. growth in the first quarter came in below expectations, while inflation rose in line with forecasts. At the same time, a decline in new unemployment claims suggested continued resilience in the labor market, even as layoffs persist in some industries.

Global markets delivered mixed results. European stocks moved higher after central banks, including the Bank of England and the European Central Bank, opted to hold interest rates steady. In Asia, Hong Kong’s Hang Seng index fell 1.3 percent, while China’s Shanghai Composite posted a modest gain of 0.1 percent following data indicating continued expansion in factory activity.

Together, the week’s developments highlight a market environment balancing strong corporate performance against geopolitical uncertainty and shifting economic signals.