Oil prices surged more than 5% to a two-week high on Thursday after Washington imposed sanctions on major Russian companies over the Ukraine war, while major stock indexes climbed as gains in U.S. and European energy shares helped to offset some mixed earnings news.
The sanctions, announced late Wednesday, were placed on major Russian suppliers Rosneft and Lukoil. European Union countries also approved a 19th package of sanctions on Moscow that included a ban on Russian liquefied natural gas imports, while Britain hit Rosneft and Lukoil with sanctions last week.
Wall Street stocks ended higher, with indexes gaining momentum after the White House confirmed U.S. President Donald Trump will meet Chinese President Xi Jinping next week as part of his trip through Asia.
Trade tensions between Washington and Beijing have been escalating, marked by tit-for-tat retaliatory measures announced by both sides. Confirmation that the two leaders would meet next week appeared to ease those tensions.
Energy led sector gains on the S&P 500 index, and ended 1.3% higher.
A clutch of positive earnings reports also helped to support stocks. Shares of Honeywell gained 6.8% after the company lifted its 2025 profit forecast. However, International Business Machines shares eased 0.9% after the company recorded a slowdown in growth in its key cloud software segment.
"In general, the (stock) market is responding to earnings, which for the most part continue to be good. And the other factor is that Trump placed severe sanctions on major Russian oil companies, which is being applauded by the market. You can see that in the energy sector," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The Dow Jones Industrial Average rose 144.20 points, or 0.31%, to 46,734.61, the S&P 500 gained 39.04 points, or 0.58%, to 6,738.44 and the Nasdaq Composite advanced 201.40 points, or 0.89%, to 22,941.80.
MSCI's gauge of stocks across the globe rose 4.32 points, or 0.44%, to 995.09.
The STOXX 600 index closed at a record high, led by gains in energy stocks. The pan-European STOXX 600 index advanced 0.37% to 574.43 points. Also helping sentiment, shares of Kering jumped after the Gucci owner said sales in the previous quarter declined less than analysts had expected.
Oil futures registered their biggest daily percentage gains since mid-June and their highest closes since October 8. U.S. energy data showed Russia was the world's second-biggest crude oil producer in 2024 after the U.S.
U.S. crude gained 5.6% to settle at $61.79 a barrel. Brent gained 5.43% to settle at $65.99.
U.S. Treasury yields rose, with those on the long end advancing after falling three straight sessions. Investors also braced for a report on the U.S. Consumer Price Index on Friday.
The U.S. Bureau of Labor Statistics said last week it would publish the CPI report despite the government shutdown - now on its 23rd day - to assist the Social Security Administration with its annual cost-of-living adjustment for 2026 for millions of retirees and other benefits recipients.
In afternoon trading, the yield on the benchmark U.S. 10-year Treasury note rose 4.4 basis points (bps) to 3.995% after hitting a session high of just above 4%.
The geopolitical risks renewed demand for safe-haven gold. Spot gold rose 0.76% to $4,125.00 an ounce.
Helping offset some of the angst over geopolitical flashpoints and trade tensions is the firm belief among investors that the Federal Reserve will continue to cut U.S. interest rates. The dollar index was last little changed. It has been edging higher in recent months as investors have become more confident that the Fed will act to protect the economy.
The U.S. currency was last up 0.38% on the yen at 152.525 yen, while the U.S. dollar index, which measures the greenback against a basket of currencies, was last nearly flat at 98.925.
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