Global Stocks Rebound As Inflation Data And Iran Tensions Keep Markets On Edge

Global stock markets edged higher on Thursday, recovering some of the losses recorded earlier in the week, while the U.S. dollar strengthened and oil prices climbed as investors weighed fresh inflation data and escalating tensions in the Middle East.

Investor attention remained focused on the conflict between the United States and Iran after President Donald Trump warned that Washington could strike Iran “very hard” and target the country’s key oil export hub, Kharg Island. The renewed hostilities have cast doubt on hopes for a lasting peace agreement and raised concerns about potential disruptions to global energy supplies.

Oil prices moved higher as traders reacted to the growing geopolitical risks, while gold remained relatively stable near its lowest level in more than six months.

In the United States, new economic data showed producer prices rose more than expected in May, marking the strongest annual increase in three and a half years. Higher energy costs linked to the Middle East conflict were a major factor behind the increase. At the same time, unemployment claims rose only slightly, suggesting the U.S. labor market remains resilient.

Wall Street recovered from two consecutive sessions of losses, with investors cautiously returning to the market. Analysts noted that while uncertainty surrounding the Middle East remains a major concern, strong economic fundamentals have so far prevented fears of a broader market downturn.

Technology stocks, particularly chipmakers, helped drive gains, although software giant Oracle came under pressure. The company’s shares fell 11% after announcing ambitious AI investment plans and a proposal to raise nearly $40 billion through debt and equity financing, prompting concerns among analysts.

By midday trading in New York:

• The Dow Jones Industrial Average gained 420 points (0.84%) to 50,337.
• The S&P 500 rose 41 points (0.57%) to 7,308.
• The Nasdaq Composite advanced 209 points (0.83%) to 25,378.

Globally, MSCI’s world equities index climbed 0.37%, reflecting a modest improvement in investor sentiment.

European markets also moved higher, with the STOXX 600 index rising 0.54% after the European Central Bank delivered its first interest rate increase in nearly three years, a move that had been widely anticipated by investors.

Despite the rebound in stocks, markets remain cautious as traders continue to monitor inflation trends, central bank policy decisions, and developments in the Middle East conflict.