U.S. stocks rebounded in the afternoon to close higher after oil prices fell again below the key $100 per barrel mark on hopes fighting in Iran will end soon.
President Donald Trump told CBS News he thought “the war is very complete, pretty much,” giving investors a sigh of relief. West Texas oil dropped below $100 per barrel after jumping as high as $119 overnight on worries that the closure of the Strait of Hormuz, the main passageway for about a fifth of the world’s oil, would keep world oil supplies limited.
Without oil getting shipped, some of the world’s top oil producers also began running out of room to store oil and cut production. Kuwait and Iraq are among them. The UAE was just beginning to reduce, reports said.
Energy ministers from the Group of Seven nations, which includes Canada, France, Germany, Italy, Japan, the United Kingdom and the U.S., plan to meet virtually on Feb. 10 to discuss potentially releasing oil reserves. A coordinated effort to release oil could also keep oil prices in check.
The blue-chip Dow closed up 0.5%, or 239.25 points, after falling more than 800 points in the morning, to 47,740.80. The broad S&P 500 rose 0.83%, or 55.93 points, to 6,795.95, and the tech-heavy Nasdaq gained 1.38%, or 308.267 points, to 22,695.946. West Texas oil was down 6.59% at $84.91 per barrel, way off its $119 peak overnight.
NEW YORK, NEW YORK – MARCH 06: Financial news is displayed as traders work on the floor of the New York Stock Exchange during morning trading on March 06, 2026 in New York City. Stocks continue to tumble with all three major indexes continuing to dip with the Dow Jones losing nearly 800 points at opening as oil prices raise due to concerns of the war with Iran and a weak jobs report release. (Photo by Michael M. Santiago/Getty Images)
Are stocks headed into a bear market?
A bear market is a stock market drop of 20% or more from a recent peak, or a closing high. That differs from corrections, which refer to drops of at least 10%. So far, analysts do not see one ahead.
“On several metrics we aren’t quite there yet, which explains why equities aren’t yet seeing bear-market declines, like we saw in 2022,” said Henry Allen, macrostrategist at Deutsche Bank.
For perspective, the S&P 500 dropped 2% last week and is now about 3.7% off its all-time high of 7,002 set on January 28. “That decline may be shrouded with ominous headlines, but the percentage drop in the index is just a mere flesh wound,” Jay Woods, chief market strategist at Freedom Capital Markets, noted.
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How high will gas prices climb?
Consumers have already been feeling some pain at the pump, analysts said. In just a week, gas prices have climbed more than 51 cents, on average, one of the fastest rates in years as oil surged on the standstill at the Strait of Hormuz.
Patrick De Haan, head of petroleum analysis at GasBuddy, said in a blog post that “gasoline prices in many states could climb another 20 to 50 cents per gallon this week,” and diesel even more.
Travelers can also expect rises in airfares and air cargo with jet fuel costs having nearly doubled, Woods said.
“Rising gas prices is the largest tax on the American consumer,” Woods said. “They will impact our discretionary spending and normal routines may change as a result. It will also cause travel costs to rise and will impact the transportation industry as well as the leisure sector over the coming summer travel season.”
How long will stocks drop and oil prices rise?
No one knows for sure how long oil prices will stay elevated, but as of now, Allen said investors aren’t expecting them to stay high for long. He points to the oil futures market, which is a gauge of where investors are pricing oil in months ahead.
“Markets don’t believe that will be sustained, with oil futures still expecting a pullback over the months ahead,” Allen said. “That assumption of a temporary conflict has prevented an even bigger (stock) selloff so far.”
(Updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
This article originally appeared on USA TODAY: Stock market news today: What led to sharp reversal of Dow, S&P 500?