Gold, Silver Drop as Oil Prices Swing

Stocks pared their losses on Wall Street as an early spike in crude oil prices eased later in the day. The roller-coaster ride for oil prices Thursday underscored how they're dictating where financial markets, and maybe even the economy, are heading.

• The S&P 500 fell 18.21 points, or 0.3%, to 6,606.49.
• The Dow Jones Industrial Average fell 203.72 points, or 0.4%, to 46,021.43.
• The Nasdaq composite fell 61.73 points, or 0.3%, to 22,090.69.

Markets in Europe and Asia had considerably larger losses when oil prices were higher earlier in the day, the AP reports. If oil prices stay high, the worry is that they could cause inflation to rip higher around the world.

The morning began as a scary one after Brent crude, the international standard, briefly rose above $119 per barrel, up from roughly $70 before the war with Iran began. The jump came after Iran intensified attacks on oil and gas facilities around the Persian Gulf in response to an Israeli attack on an important Iranian natural gas field. That worsened fears that the war may knock out production of oil and gas in the Gulf for a long time, which would mean high prices could last a while and cause inflation to rip higher around the world. Stock indexes dropped 3.4% in Japan, 2.8% in Germany, and 2.7% in South Korea.

• But oil prices pared their big gains as the day progressed, the latest in their hour-to-hour swings since the war began. Brent oil settled at $108.65, up only 1.2% from the day before, and then eased further as trading continued. After briefly topping $101, a barrel of benchmark of benchmark US crude settled at $96.14 and then eased toward $94.

That helped stocks on Wall Street pare their own losses, which were already more modest than in Europe and Asia because US companies are less reliant on oil from the Middle East. The yo-yo effect hit the bond market, too, where Treasury yields jumped in the morning with the price of oil and then eased back. The two-year Treasury yield got as high as 3.96% and touched its highest level since the summer before pulling back to 3.79%. Higher Treasury yields grind down on prices for all kinds of investments, from stocks to crypto to gold. Gold sank 5.9% to settle at $4,605.70 per ounce. Silver fell even more and dropped 8.2%.

Stocks of companies that mine such metals fell to some of Wall Street's sharpest losses. Newmont slumped 6.9%, and Freeport-McMoRan fell 3.3%. Micron Technology fell 3.8% even though it reported a blowout quarter of much higher profit and revenue than analysts expected. It gave back some of its big gain for the year so far, which came into the day at nearly 62%, because of a worldwide shortage of computer memory. Helping to limit Wall Street's losses was Rivian Automotive, which rose 3.8%. It announced a partnership where Uber will invest up to $1.25 billion in the company and expects to buy 10,000 autonomous robotaxis. Uber Technologies fell 1.7%.