NEW YORK (AP) — Oil prices kept spurting higher Wednesday and neared their highest levels since 2022. The leap, along with hints that some Federal Reserve officials don't want to cut interest rates any time soon, sent tremors through the U.S. bond market, but U.S. stocks dipped only modestly.
The S&P 500 fell 0.4% and was on track for a second slip after setting its latest all-time high. The Dow Jones Industrial Average was down 394 points, or 0.8%, as of 2:30 p.m. Eastern time, and the Nasdaq composite was 0.4% lower.
The action was more dramatic in the oil market, where the price for a barrel of Brent crude to be delivered in July jumped 5.8% to $110.41 per barrel. It's where most of the trading is happening in the Brent market, and it got as high as $111.50 earlier in the day.
The highest price reached since the war with Iran began is $119.50 for the most actively traded Brent contract, reached last month. On Wednesday, the price for a barrel of Brent crude to be delivered in June, which is getting less trading action than July's contract, briefly breached that mark. It got as high as $119.76.
Oil prices have climbed as President Donald Trump appears willing to keep up the U.S. blockade of Iranian ships, which is preventing the country from making money by selling oil. Iran, in turn, is keeping the Strait of Hormuz closed to other oil tankers hoping to carry crude to customers worldwide as long as the blockade continues.
High oil prices are one of the reasons the Federal Reserve cited when it said Wednesday it is holding off on resuming its cuts to interest rates. While lower rates could give the economy a boost, they also risk worsening inflation.
Three Fed officials also said in their meeting that they did not want to include anything suggesting more cuts may be coming in the central bank's statement announcing the decision.
Treasury yields climbed in the bond market immediately afterward, adding to gains from earlier in the day due to rising oil prices. The yield on the 10-year Treasury jumped to 4.40% from 4.36% late Tuesday.
The two-year Treasury yield, which more closely tracks expectations for Fed action, rose more. It jumped to 3.91% from 3.84%. Traders are still largely expecting the Fed to hold rates steady through the end of this year, according to data from CME Group. But they are once again betting on a small chance for a hike to rates.
Still, the U.S. stock market remained largely resilient as more companies joined the procession reporting stronger profit growth for the start of 2026 than analysts expected.
Visa jumped 9% after delivering stronger results than analysts expected, and CEO Ryan McInerney said consumer spending remained resilient in the quarter. Starbucks climbed 8.9% after likewise reporting better results than expected, while saying customers spent more at each visit, particularly at its North American stores.
But those not meeting expectations have gotten punished. GE Healthcare Technologies dropped 12.6% after falling short of analysts’ forecasts. Robinhood Markets tumbled 14.7% after reporting growth in profit that was not as strong as analysts expected.
Booking Holdings swung between losses and gains after the online travel company said the war with Iran is affecting its results and kept some potential customers from booking rooms during the latest quarter.
The company behind Booking.com, Priceline and other brands is expecting the conflict to continue affecting its business through the end of June. It could affect travel not only in the Middle East but also in major transit corridors, such as between Europe and Asia.
In stock markets abroad, indexes fell in Europe following a stronger finish in Asia. Hong Kong’s Hang Seng jumped 1.7% for one of the world’s strongest moves.
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AP Business Writer Chan Ho-him contributed to this report.
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