Dow Jones slip, S&P gain as oil surge and market volatility spike

US stocks closed slightly mixed on Thursday after paring deeper losses, as diplomatic signals from the Middle East helped calm markets rattled earlier by President Donald Trump’s threats of tougher action against Iran ahead of the long holiday weekend.

Investor sentiment steadied in the afternoon after Iran’s foreign ministry said it was drafting a protocol with Oman to manage traffic through the Strait of Hormuz, while Britain noted that dozens of countries were discussing ways to end the crisis.

These developments eased worries about prolonged disruption to global oil flows.

Oil prices surge as geopolitical risks persist

Stocks opened lower amid rising oil prices after Trump signaled more aggressive attacks ahead of the Good Friday holiday.

Front-month US crude prices surged 11% to around $111 a barrel, while Brent crude closed up about 7% near $108.

Traders, however, priced oil at about $82 per barrel in October, signaling expectations that the disruption may be temporary.

The surge in oil contributed to extreme intraday volatility. At their lows, the Dow was down more than 600 points, or 1.4%, while the S&P 500 and Nasdaq fell 1.5% and 2.2%, respectively.

The Dow ultimately ended the day down 61.23 points, or 0.13%, at 46,504.51. The S&P 500 gained 7.26 points, or 0.11%, to 6,582.58, while the Nasdaq rose 35.92 points, or 0.18%, to 21,876.87.

Investors navigate volatility ahead of long weekend

Market volatility was further highlighted by the CBOE Volatility Index, which rose above 25. “I think investors are having knee-jerk reactions — they want the news to be good, but then think about it a little longer and decide perhaps the uncertainty is still too high, hence the high intraday volatility,” said Melissa Brown, managing director of investment decision research at SimCorp in a CNBC report.

Trump’s address on Wednesday night intensified market swings. While he noted that the US is “getting very close” to ending the Iran war, he added that the nation would hit Tehran “extremely hard.” He said, “Over the next two to three weeks, we’re going to bring them back to the stone ages where they belong.”

Brown noted that oil prices would likely “stay higher for longer,” with gas prices continuing to pressure inflation.

Investors were also watching for upcoming economic data.

Initial jobless claims for the week ending March 28 and March’s nonfarm payroll report are set for release, while markets will remain closed for Good Friday.

Stocks most resilient to economic stress performed better, with utilities rising, while consumer discretionary stocks, including Tesla, fell.

Globalstar shares surged after reports of Amazon’s talks to acquire its low-earth-orbit satellite company.

Thursday’s session highlighted the tension between geopolitical risks, energy market volatility, and broader investor caution as the US heads into a shortened trading week.