Markets React to Middle East Tensions

US equity indexes were down in late-morning and midday trading on Thursday, with broad-market exchange-traded funds showing mixed performance as one major ETF rose while another fell. Benchmarks fell intraday and after midday as investors reacted to headlines linked to tensions involving Iran.

Reports said US benchmark equity indexes declined while oil prices surged after remarks by US President Donald Trump threatening more attacks on Iran. Subsequent coverage noted that indexes trimmed or pared earlier losses as the session progressed, though they remained lower on the day.

All three major US stock indexes were reported down in late-morning trading as investors monitored developments in the Middle East and their potential impact on global trade routes and energy supplies.

Several reports highlighted that Iran and Oman were working on diplomatic efforts to reopen or manage traffic through the Strait of Hormuz. Articles cited drafting of a traffic protocol and broader diplomacy aimed at reopening the key shipping lane.

US equity indexes were described as clawing back intraday losses and paring earlier declines amid these diplomatic moves, suggesting some easing of immediate market stress even as geopolitical risks remained in focus.

Crude oil futures rose during the session as traders weighed both the threat of further military action and the possibility of negotiated arrangements to keep the waterway open for energy shipments.

Sector updates showed a split performance across US industries. Energy stocks were higher Thursday afternoon, with the NYSE Energy Sector Index reported rising in separate updates, including a noted 0.9% gain in one report and a 0.9% increase in another.

Tech stocks were higher in afternoon trading, with a technology sector exchange-traded fund advancing. Financial stocks were slightly higher, with the NYSE Financial Index edging up in Thursday afternoon dealings.

Health care stocks moved in the opposite direction, with the NYSE Health Care Index down 0.6% in afternoon trade. Consumer stocks were described as mixed, with consumer staples and related sector funds showing varied performance.

Gold traded lower in midafternoon dealings on Thursday. Reports linked the move to a stronger US dollar, which rose after President Trump threatened to escalate attacks on Iran, pressuring the precious metal.

At the same time, oil prices were described as soaring as markets reacted to the potential for supply disruption from conflict and shipping constraints in the Middle East, particularly around the Strait of Hormuz.

These moves underscored a broader flight toward assets perceived as benefiting from higher energy prices, contrasting with weakness in traditional safe-haven gold under the influence of currency markets.

European stock markets were mixed in Thursday trading. They rebounded from a sharp decline in earlier trading as investor concerns over a wider Middle East war softened later in the session.

European equities traded in the US as American depositary receipts were tracking lower late Thursday, indicating pressure on some overseas names listed on US exchanges despite the recovery seen in local European markets.

In Canada, the Toronto Stock Exchange was up 60 points at midday, with most sectors higher and energy leading gains, reflecting the positive impact of rising crude oil prices on Canadian energy names.