Stocks Edge Higher as Oil Surge Keeps Volatility Front of Mind

US equities posted a modest second straight advance as investors balanced resilient risk appetite against escalating geopolitical tensions and higher oil prices tied to the Iran conflict. Crude briefly surged before settling above $96, while Treasuries and the dollar softened ahead of the Federal Reserve decision, reinforcing a cautious but constructive tone across markets.

Key Headlines & Market Movers:

Oil Spike and Geopolitical Risks in Focus: Energy markets remained volatile as threats to shipping through the Strait of Hormuz and escalating hostilities between Israel and Iran kept crude elevated, raising concerns about inflation and growth trade-offs; despite this backdrop, equities held up as investors continued to look through near-term disruptions while acknowledging that a prolonged conflict could weigh more heavily on risk assets.

Fed Meeting and Rates Outlook: Markets broadly expect the Fed to hold rates steady this week, with focus shifting to guidance on how policymakers may respond if energy-driven inflation pressures conflict with slowing growth; falling Treasury yields and a weaker dollar reflected positioning for a cautious, wait-and-see tone amid heightened uncertainty.

Sector and Corporate Movers: Airlines rallied on strong booking trends and optimism about pricing power despite higher fuel costs, while tech performance was mixed as Nvidia slipped even as it highlighted AI manufacturing expansion; Qualcomm gained on an expanded buyback and dividend increase, Boeing flagged operational headwinds, and Eli Lilly fell after a bearish analyst call.

S&P 500 Sector Performance

Looking Ahead

Investors will watch the Fed decision and press conference for clues on policy direction, while monitoring developments in the Middle East and oil markets for signals on inflation risks and earnings implications; near term, volatility is likely to persist, but improving sentiment indicators suggest markets may continue searching for a durable bottom if macro conditions stabilize.

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