Tech stands as the only S&P 500 sector to rise since the Iran war began
Oil is surging again, a fifth of the world’s crude route faces disruption, and global money is flowing back into US tech instead of “heavy asset” plays.
According to BNN Bloomberg, the Dow Jones industrial average fell 289.24 points, or 0.6 percent, to 47,417.27 on Wednesday, while the S&P 500 index slipped 5.68 points to 6,775.80 and the Nasdaq composite rose 19.03 points to 22,716.13.
In Toronto, the S&P/TSX composite index lost 150.82 points to 33,119.83.
West Texas Intermediate gained more than 4 percent to settle at US$87.25 per barrel and Brent crude climbed about 4.8 percent to US$91.98, according to CNBC.
Both moves came even after the International Energy Agency said it will release 400m barrels of oil from emergency reserves, the largest-ever drawdown, to address supply disruption from the war with Iran.
Worries centre on the Strait of Hormuz, a narrow waterway off Iran’s coast where about a fifth of the world’s oil normally sails each day, BNN Bloomberg noted.
The war has halted most traffic through the strait, filling regional storage tanks and pushing some producers to cut output.
CNBC reported that US forces on Tuesday sank several Iranian ships, including 16 minelayers, near the strait as Tehran sought to mine the shipping lane.
The United Kingdom Maritime Trade Operations said three cargo ships off Iran’s coast, including one in the strait, were struck by projectiles.
BNN Bloomberg added that the United States said it took out more than a dozen minelaying Iranian vessels, while the Islamic Republic vowed to block the region’s oil exports and said it would not allow “even a single liter” to be shipped to its enemies.
On Wednesday, Natural Resources Minister Tim Hodgson said Canada will “do its part” to lower the cost of oil globally.
Despite the record IEA release, Ron Albahary, chief investment officer at Laird Norton Wetherby, told CNBC the decision “doesn’t solve the other issues that are going to affect the global economy,” citing refined products such as jet fuel that flow through the Strait of Hormuz as a key problem.
Pierre‑Benoît Gauthier, vice‑president of investment strategy at IG Wealth Management, said on BNN Bloomberg that markets have realised reserves are already low after being tapped following Russia’s invasion of Ukraine and that it will take time for new supply to reach the market.
The inflation backdrop remains challenging.
The US consumer price index increased 2.4 percent year over year in February, matching January and coming in line with economists polled by Dow Jones, according to CNBC.
BNN Bloomberg reported that this was better than the 2.5 percent economists expected but still above the US Federal Reserve’s two percent target and does not include the latest gasoline spike.
Looking ahead, Gary Schlossberg, global strategist at Wells Fargo Investment Institute, said he expects “a spring bulge in inflation” driven by higher energy prices from the Iran war.
In his view, the war’s duration will “dictate the landing spot for headline inflation by year end.”
The same outlet noted that high inflation combined with a stagnating economy and weakness in hiring by US employers would create a worst‑case “stagflation” scenario that the Fed “has no good tools” to fix.
Because of the oil spike, traders have pushed back forecasts for when the Fed could resume interest rate cuts, BNN Bloomberg reported.
US President Donald Trump has been angrily calling for such cuts, which could support the economy and job market but risk worsening inflation.
In equities, investors are pivoting back to US technology.
The Financial Times reported that technology has been the best‑performing S&P 500 sector since the conflict began, rising 1.5 percent from the February 27 close — the eve of the US‑Israeli bombardment — while every other sector has fallen.
An index of the “Magnificent Seven” megacap tech stocks fell more than 6 percent in the first two months of the year amid heavy spending and “AI disruption” worries.
After the conflict began, it climbed more than 1 percent even as the wider US market and other global indices moved lower.
Christian Mueller‑Glissmann, head of asset allocation research at Goldman Sachs, said clients often view the Magnificent Seven as “a safety asset.” He compared big tech groups to “countries in terms of the size of their balance sheets and their [competitive] moats.”
Software names, previously hit hardest by “AI disruption” worries, have been among the most bought within information technology as hedge funds unwind shorts and investors revisit the sector, according to a Goldman Sachs prime services report cited by the Financial Times.
Deutsche Bank has upgraded technology from underweight to neutral and software to overweight, saying “AI disruption worries have peaked.”
Mike Fox, head of equities at Royal London Asset Management, said software is “seen to be less impacted by the war in Iran” because “lower energy usage compared with many other sectors leaves it relatively insulated against higher oil prices.”
At the single‑name level, Oracle stood out.
CNBC said the stock jumped 9 percent after fiscal third‑quarter earnings and revenue beat analysts’ expectations and the company raised its fiscal 2027 revenue forecast.
BNN Bloomberg reported that Oracle rose 9.2 percent after it lifted its outlook for revenue growth next fiscal year, helped by demand for cloud computing for artificial‑intelligence training and inferencing.
Campbell’s, by contrast, sank 7.1 percent after reporting weaker‑than‑expected profit, hurt by struggles in its snack business, and cutting its revenue and profit forecasts for the fiscal year.
The Canadian dollar traded at 73.60 cents US, down from 73.71 cents US on Tuesday, while the April gold contract fell US$63.00 to US$5,179.10 an ounce.
