NEW YORK — Oil prices are yo-yoing back up on Tuesday, but the U.S. stock market is holding steadier this time and rising.
The S&P 500 climbed 0.7% in early trading, coming off its best day since the war with Iran began. The Dow Jones Industrial Average was up 428 points, or 0.9%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% higher.
It’s a break, for now at least, from the usual playbook since the start of the war, where stock prices have gone in the opposite direction of oil prices. The fear in financial markets has been that a long-term disruption to the global flow of oil because of the war could send prices so high for so long that it damages the global economy.
On Tuesday, the price for a barrel of benchmark U.S. crude rose 1.1% to $94.53. Brent crude, the international standard, climbed 1.9% to $102.15. But that’s still below where oil prices were at the end of last week.
Delta Air Lines also offered an encouraging signal about the strength of the economy after raising its forecast for revenue for the first three months of 2026. It said it’s seen demand accelerate into March for flights from both businesses and households.
Of course, it’s also having to pay higher prices for jet fuel because of the spike in oil prices. But it said the strong demand for flights could allow it nevertheless to report profit for the start of 2026 that’s in line with its earlier forecast.
Delta’s stock flew 4.9% higher, and it helped other airline stocks trim their own sharp losses for the year so far. American Airlines rose 4%, and United Airlines climbed 3.7%.
Another winner was Uber Technologies, which rose 5.2% after announcing an expansion of its partnership with Nvidia. They plan to launch a fleet of autonomous vehicles using Nvidia’s technology, beginning with Los Angeles and San Francisco in the first half of next year.
Nvidia added 0.4%. A day earlier, its CEO, Jensen Huang, said he foresaw demand for AI chips through 2027 growing to $1 trillion.
The U.S. stock market has a track record of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don’t stay too high for too long. Many professional investors are expecting that to be the case again, which has helped keep U.S. stock prices near their record levels.
For all its dramatic swings over the last couple weeks, including several that struck hour to hour, the S&P 500 is less than 4% below its all-time high.
In the meantime, Treasury yields have climbed on expectations that higher oil prices will keep the Federal Reserve from resuming its cuts to interest rates for a while. Higher yields in turn push downward on prices for stocks and all kinds of investments.
The yield on the 10-year Treasury eased to 4.20% from 4.23% late Monday, but it remains well above the 3.97% level it was at before the war with Iran began.
Cuts to interest rates by the Fed would give the economy and job market a boost, and President Donald Trump has been calling for them angrily. But reductions would also worsen inflation.
The Fed will make its next announcement on interest rates Wednesday afternoon, and traders see virtually no chance of a cut, according to data from CME Group.
In Australia, the central bank is actually moving in the opposite direction. Citing higher fuel prices, the Reserve Bank of Australia raised interest rates for the first time since November 2023.
In stock markets abroad, European indexes rose following a mixed finish in Asia. Stocks rose 0.8% in London and fell 0.9% in Shanghai for two of the world’s bigger moves.
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AP Writers Matt Ott, Elaine Kurtenbach and Rod McGuirk contributed.
