Oil prices rise as the Iran war drags on, but US stocks inch to more
records
[May 12, 2026] By
STAN CHOE
NEW YORK (AP) — Oil prices rose Monday as the war with Iran threatens to
drag on for longer, but the U.S. stock market nevertheless inched toward
more records.
The price for a barrel of Brent crude oil climbed 2.9% to settle at
$104.21 after President Donald Trump said the U.S.-Iran ceasefire was on
“life support” after he rejected Iran’s latest proposal to end their
war. The rejection raises the stakes for Trump’s trip this week to
China, where he could urge President Xi Jinping to pressure Iran into
making concessions. Xi has influence because China is the biggest buyer
of Iran’s sanctioned crude oil.
The war has already sent the price for a barrel of Brent up from roughly
$70 and delivered a blast of painful inflation through the global
economy. That’s because it has shut the Strait of Hormuz and kept oil
tankers stuck in the Persian Gulf instead of delivering crude to
customers worldwide.
Still, the U.S. stock market has set a run of records on hopes that the
war will not keep oil prices high for very long. Companies are meanwhile
producing bigger profits than analysts expected, while signals suggest
the U.S. economy is holding up even though households are feeling
discouraged by expensive gasoline and tariffs.
On Wall Street, the S&P 500 rose 0.2% from its prior all-time high set
on Friday. The Dow Jones Industrial Average gained 95 points, or 0.2%,
and the Nasdaq composite added 0.1% to reach its own all-time high.
The majority of stocks within the S&P 500 fell, even though the overall
index rose. Among them was Mosaic, which reported much weaker results
for the latest quarter than analysts expected.
The fertilizer company is benefiting from higher prices for its
products, but it’s also contending with much higher prices for sulfur
and other raw materials because of logistics snarls created by the war
with Iran. Mosaic’s stock fell 1.8%.
Stocks of companies whose customers have the least cushion to absorb
higher gasoline prices also struggled, and Dollar General fell 7.6%.
Businesses with big fuel bills likewise had sharp losses, including
drops of 4.3% for Royal Caribbean and 3.2% for Southwest Airlines.
Helping to offset that was Fox, which climbed 7.6% after reporting
stronger profit and revenue for the latest quarter than analysts
expected.
More than four out of every five companies in the S&P 500 that have
reported their results for the latest quarter so far have topped profit
expectations, and they’re on track to deliver overall growth of nearly
28%, according to FactSet. If that turns out to be the case, it would be
the best growth since the end of 2021.
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Specialists Anthony Matesic, left, and Dilip Patel work on the floor
of the New York Stock Exchange, Monday, May 11, 2026. (AP
Photo/Richard Drew)
 It’s not just U.S. companies
muscling past analysts’ profit expectations. Globally, companies are
on track for their strongest growth in more than four years,
according to Deutsche Bank strategists led by Binky Chadha. The boom
in artificial-intelligence technology has helped corporate profits
rise at a faster rate than overall economies.
Outside of earnings reports, Beazer Homes USA soared 34% after Dream
Finders Homes offered to buy it in a deal valued at roughly $704
million. A combination would create the country’s seventh-largest
homebuilder, and Dream Finders is asking Beazer’s shareholders to
push its management and board to OK the deal after making several
attempts itself.
Dream Finders rose 5%.
Tech stocks were also strong, continuing their big run amid the AI
boom. Gains of 2% for Nvidia and 6.5% for Micron Technology were the
strongest forces pushing the S&P 500 upward.
All told, the S&P 500 rose 13.91 points to 7,412.84. The Dow Jones
Industrial Average added 95.31 to 49,704.47, and the Nasdaq
composite gained 27.05 to 26,274.13.
In stock markets abroad, indexes were mixed across Europe and Asia.
France’s CAC 40 fell 0.7% for one of the world’s bigger losses,
while South Korea’s Kospi soared 4.3% thanks to gains for Samsung
Electronics, SK Hynix and other tech stocks benefiting from AI.
In the bond market, Treasury yields ticked higher. The 10-year yield
rose to 4.40% from 4.38% late Friday.
Yields had moderated a bit this month, but they remain well above
where they were before the war with Iran began. Higher yields can
raise rates for mortgages and other kinds of loans going to U.S.
households and businesses, which in turn can slow the economy.
Higher yields also tend to push downward on prices for stocks and
other kinds of investments.
A report on Monday said the pace of sales for previously occupied
U.S. homes was weaker last month than economists expected.
___
AP Business Writers Chan Ho-him and Matt Ott contributed to this
report.
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