Stocks rise as oil climbs and technology shares recover

Stock markets rose on Tuesday as technology shares continued to recover, while oil prices climbed after Iran targeted US radar and air defence installations in the Gulf.

Chris Beauchamp, chief market analyst at IG, said traders had seen oil, equities and precious metals rise at the same time. International benchmark Brent crude reached $91.99 per barrel, its highest level since mid-June, before giving back part of the gain.

Wall Street stocks stayed positive throughout the session. The S&P 500 closed up 0.9 percent, while the Dow Jones Industrial Average rose 0.7 percent and the Nasdaq Composite gained 1.3 percent. Sam Stovall of CFRA Research said the market did not appear willing to fall and said investors expected company earnings surprises to remain positive.

The report said Iran had increased attacks in the Middle East two weeks after its war with the United States resumed. Iran's Revolutionary Guards said they had attacked and stopped two non-compliant oil tankers attempting to pass through the Hormuz Strait. Tehran has tried to blockade the strait, through which a fifth of the world's oil supplies transited before the war, as leverage since the US-Israeli attack that started the war on February 28.

President Donald Trump said the United States planned more attacks, saying it was not finished and was not leaving. He also said he would take care of the Houthi rebels if the Iran-backed group followed through on a threatened blockade of Saudi ports.

Sucden brokers said oil remained the key macroeconomic anchor and expected markets to stay driven by headlines in the near term. The rise in oil prices did not weigh on equities trading as it often does, with investors returning to technology stocks.

Technology stocks have at times fallen sharply in recent months as investors worried about high valuations in the artificial intelligence sector. Chipmakers led a sell-off last week, but the Nasdaq rose for a second straight day, led by semiconductor shares.

The recovery in technology shares faces a test from upcoming earnings from Tesla and Alphabet, followed next week by Microsoft, Meta, Apple and Amazon. Stephen Innes of SPI Asset Management said large technology companies need to show that artificial intelligence revenue, margins and cash flow can justify large spending on AI infrastructure. Bret Kenwell of eToro said investors want growth and guidance strong enough to support high valuations.

Europe's main stock markets also ended higher. London's FTSE 100 rose 0.6 percent after investors reacted positively to the appointment of John Healey as finance minister. Investors watched British bond yields after new Prime Minister Andy Burnham, facing stretched public finances, said he would cut taxes on household electricity bills. UK bond yields edged higher and the pound fell.

Around 2020 GMT, the Dow was up 0.7 percent at 52,224.64, the S&P 500 was up 0.9 percent at 7,509.20 and the Nasdaq Composite was up 1.3 percent at 25,837.21. London's FTSE 100 closed up 0.6 percent at 10,585.91, Paris's CAC 40 rose 0.3 percent to 8,363.14 and Frankfurt's DAX gained 0.7 percent to 25,011.35. Tokyo's Nikkei 225 closed up 3.3 percent at 66,232.19, Hong Kong's Hang Seng Index was flat at 25,132.29 and Shanghai's Composite rose 1.8 percent to 3,864.37.

Brent North Sea crude was up 2.0 percent at $91.01 per barrel, and West Texas Intermediate was up 2.0 percent at $84.91 per barrel. The euro fell to $1.1406 from $1.1414, the pound fell to $1.3383 from $1.3431 on Monday, the euro rose to 85.20 pence from 84.98 pence and the dollar rose to 163.17 yen from 162.50 yen.