Oil, Defense Stocks Climb

Oil prices climbed with worries about the possible spillover effects of violence in the Middle East. The stock market was less fearful, though, and flipped from modest morning losses following potentially encouraging news on interest rates, which have been dragging Wall Street mainly lower since the summer.

• The S&P 500 rose 27.16, or 0.6%, to 4,335.66.
• The Dow Jones Industrial Average gained 197.07 points, or 0.6%, to 33,604.65.
• The Nasdaq composite climbed 52.90, or 0.4%, to 13,484.24.

All three indexes perked higher after two officials at the Federal Reserve suggested they may not need to raise interest rates again at their next meeting Nov. 1, because a jump in longer-term bond yields may be helping to cool inflation without further market-rattling hikes by the Fed, the AP reports.

That gave stocks some oxygen and helped them erase modest losses from the morning. The S&P 500 had sagged by 0.6% in its first trading after Hamas launched a surprise attack against Israel, which then formally declared war. The area under conflict is not home to major oil production, but fears that the fighting could spill into the politics around the crude market sent a barrel of US oil up $3.59 to $86.38. Brent crude, the international standard, rose $3.57 to $88.15 per barrel. One potential outcome of the violence is a slowdown in Iranian oil exports, which have been growing this year, according to Barclays energy analyst Amarpreet Singh

Monday's rise in crude helped oil and gas stocks to some of Wall Street's biggest gains. Marathon Oil rose 6.6%, and Halliburton climbed 6.8%. Stocks of defense contractors that make weapons were also particularly strong. Northrop Grumman rallied 11.4%, and L3Harris Technologies gained 10%. On the opposite end were companies that count fuel as among their biggest expenses. United Airlines sank 4.9%, and Carnival fell 4.3%. Major airlines have suspended flights to Israel as the US State Department issued travel advisories for the region, citing potential for terrorism and civil unrest.

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