US Stocks Rise, Oil Prices Stabilize as Iran War Escalates

Key Takeaways

• US stocks rose 0.75% Wednesday and European stocks recovered from some of the week’s earlier losses.
• Asian stocks extended declines in Wednesday’s session, with South Korean stocks marking their worst day since 2008.
• Oil prices remained stable but elevatedafter the Trump administration said it would provide assistance to resume energy shipments through the Strait of Hormuz, without providing specific details.

US and European stocks rebounded on Wednesday, as a recent selloff showed signs of easing, even as Asian economies vulnerable to energy imports recorded record losses.

The Morningstar US Market Index closed 0.75% higher on Wednesday after a volatile session on Tuesday, which saw the S&P 500 decline sharply before rebounding to close about 1% lower. The S&P 500 closed 0.78% higher, while the Nasdaq 100 added 1.30%.

Within the Morningstar style box, large capitalization growth stocks led the way on Wednesday with gains of 2.1%. Gains in value stocks were more muted, with the large cap value category up 0.26%.

Tesla TSLA was up3.5% and Nvidia NVDA added 1.6%, while business intelligence firm Strategy MSTR was among the top performers, up 10.4%.

“Up to now, the market has been rushing to reprice markets on the basis of the increased risk stemming from the conflict,” says Morningstar chief European markets correspondent Michael Field. “Today marks the point where investors are realising that some sectors and stocks have fallen too much, and the opportunities that have presented themselves are worth buying into.” The Morningstar Europe Market Index was up 1.6% on Wednesday.

“The market action yesterday afternoon and this morning shows a dialing down of market anxiety, but participants will continue to be highly reactive to news flow,” says James Klempster, deputy head of Liontrust’s multi-asset team. “Markets seem to have found a level that they are happy to sit at in a wait-and-see mode for now.”

Asian markets extended a broad selloff on Wednesday, with South Korean stocks plunging as risk-off sentiment continued to weigh on trading amid the escalating Iran war.

The Morningstar Korea Index shed more than 12% to record its worst day since 2008 in dollar terms, with the Korea Exchange at one stage halting trading to stem selling, particularly in tech heavyweights like Samsung Electronics 005930, SK Hynix 000660 and LG 066570. Its losses for the week to date are nearly 21%. The broader Morningstar Asia Index fell 3% as other regional markets shifted lower, chiefly in Japan and Hong Kong, as investors assessed the impact of rising oil prices on major oil-importing economies.

Oil Prices Stabilize

Energy prices stabilized on Wednesday after President Donald Trump said the US would provide assistance to tankers in the Strait of Hormuz as the escalating conflict and punitive insurance costs have effectively halted shipments through the critical maritime gateway.

Brent crude oil ticked up 0.3% to $82 during Wednesday’s session, while WTI crude was trading at $75, up 0.9% for the day.

Spanish Stocks Unfazed After Drastic Trade Threat from Trump

Spanish equities traded in line with broader European peers after President Trump threatened to cut off all trade with the country after Spain refused to allow US forces to use its bases for strikes on Iran. The Morningstar Spain Index was up 2.8% in dollar terms as US markets opened, with infrastructure group Acciona ANA and IT firm Indra IDR among the top performers.

Korea’s Selloff Follows a Breakneck Rally

Korea’s KOSPI benchmark had risen sharply over the past year, rallying 75% in 2025 to become the year’s top-performing regional benchmark as investors piled into semiconductor giants amid the AI buildout. However, analysts note that the index’s heavy concentration of tech names (and their reliance on energy) had made it a major casualty of shifting investor appetite.

“We believe that the drop in share prices is partly driven by profit taking after a strong runup amidst a risk-off environment but also implies growing concern that the AI datacenter adoption pace might slow due to its significantly higher energy costs than regular data centers,” says Lorraine Tan, Asia director of equity research at Morningstar.