New York Stock Market Rises Amid Oil War: Relief Rally or Illusion?

On the 25th (local time), U.S. equity markets rebounded despite oil shocks from the Middle East and lingering inflation concerns. The S&P 500 rose 0.54% to close at 6,591.90, the Dow Jones Industrial Average gained 0.66% to finish at 46,429.49, and the Nasdaq advanced 0.77% to end the day at 21,929.83. Investors weighed Middle East developments, corporate earnings and Federal Reserve policy in tandem, resulting in a cautious resurgence of risk appetite.

Economic indicators did little to ease concerns. In February, U.S. import prices jumped 1.3% month-on-month—twice the market’s forecast—underscoring renewed oil-driven price pressures. However, Brent crude, which had spiked above $119 per barrel earlier this month, slipped back into the high-$90 range in recent days. That pullback helped revive some demand for risk assets, under the belief that the worst may have passed.

On the policy front, the Fed left its benchmark rate unchanged at 3.50–3.75% following its March 18 meeting, while reiterating that inflation is likely to run above the 2% target for several years. As a result, expectations for rapid rate cuts have waned. Today’s trading largely reaffirmed the prevailing scenario of modest easing later this year followed by a prolonged period of relatively high rates, leaving movements in yields and the dollar relatively muted.

On the corporate side, GameStop reported record profits for fiscal 2025 and closed up just over 1% on the day, providing a standout boost. Several industrial and infrastructure companies raised their 2026 revenue guidance, highlighting improvements in new orders and backlog. Still, most management teams specifically cited the sharp rise in oil prices and the prospect of a protracted Middle East conflict as key risks.

The ultimate wild card remains the conflict with Iran and a potential blockade of the Strait of Hormuz. Although U.S. proposals for a cease-fire and secure shipping lanes have eased oil prices from their short-term peak, the risk of supply disruptions and higher logistics costs spreading into secondary inflation pressures persists. For Korean investors, it is important to remember that in the weeks ahead, oil markets, Middle East developments and any shifts in the Fed’s rate-cut timetable will be the principal drivers of U.S. equity direction—far more so than the recent market bounce.