Financial Markets                      07/08 09:29

   Oil prices are rising, and stock markets are falling worldwide Wednesday 
after President Donald Trump raised doubts about the temporary truce in the war 
with Iran.

   NEW YORK (AP) -- Oil prices are rising, and stock markets are falling 
worldwide Wednesday after President Donald Trump raised doubts about the 
temporary truce in the war with Iran.

   The S&P 500 fell 0.5% after Trump said the agreement to pause fighting was 
"over," though he added that he would allow negotiations to continue. The Dow 
Jones Industrial Average was down 550 points, or 1%, as of 10 a.m. Eastern 
time, and the Nasdaq composite was 0.2% lower.

   The action was stronger in the oil market, where the price for a barrel of 
Brent crude climbed 4.8% to $77.74 after briefly topping $79 in the morning. 
That's still well below its peak from earlier in the war, when the price for 
the most actively traded contract reached nearly $120. But the jump is 
unsettling because oil prices had just dropped back to where they were before 
the war.

   The worry is that a continuation of the war will block the Strait of Hormuz 
and keep oil tankers bottled up in the Persian Gulf instead of delivering crude 
to customers worldwide. That could worsen inflation, which economists expected 
would ease with oil prices, and in turn force the Federal Reserve and other 
central banks to raise interest rates.

   Higher rates can keep a lid on inflation, but they also slow the economy and 
hurt prices for all kinds of investments.

   Stock markets in Europe turned lower, and oil prices climbed immediately 
after Trump said, "For me, I think it's over" about the status of the 
ceasefire. He added that U.S. representatives can continue negotiations, but he 
cast doubt on the outcome. "They can talk, but I think they're wasting their 
time," he said.

   Trump later said the United States was preparing for another night of 
strikes against Iran.

   On Wall Street, companies with big fuel bills fell to some of the biggest 
losses. American Airlines lost 3.4%, and Norwegian Cruise Line Holdings fell 
2.4%.

   Stocks of companies in the housing industry were also particularly weak. 
They were hurt by worries that rising Treasury yields in the bond market would 
lead to higher rates for mortgages and chill the industry.

   Builders FirstSource, which sells counters, windows and other building 
supplies, fell 5.2% for one of the sharper losses in the S&P 500. Homebuilders 
PulteGroup fell 3.8%, and D.R. Horton sank 3.6%.

   Helping to offset those losses was a steadying for some influential stocks 
in the artificial-intelligence industry. They've been under pressure in recent 
weeks on worries that their prices shot too high and that AI may not produce 
enough productivity and profits to make all the investments in chips and data 
centers worth it.

   Their swings carry a lot of weight on Wall Street because AI stocks have 
grown into some of the U.S. market's biggest, which gives their movements more 
effect on the S&P 500 than other stocks.

   Nvidia rose a modest 0.3%, for example, but it was still the third-strongest 
force pushing upward on the S&P 500 because of its status as the largest stock 
on Wall Street.

   The biggest push upward came from Broadcom, which rose 4%. Apple announced a 
multiyear commitment with Broadcom to design and produce custom components for 
its products. Apple said the agreement's value could top $30 billion.

   In the bond market, Treasury yields rose with the price of oil. The yield on 
the 10-year Treasury rose to 4.58% from 4.55% late Tuesday and from just 3.97% 
before the war with Iran began.

   In stock markets abroad, losses for European markets worsened after Trump 
made his comments, and Germany's DAX lost 1.6%.

   In Asia, South Korea's Kospi dropped 5.3% and continued its sharp swings 
amid dueling worries and euphoria about the AI stocks that dominate its market.

   Hong Kong's Hang Seng index was an outlier and rose 3%.

   Shares that trade in Hong Kong of Chinese AI startup Zhipu, known also as 
Z.ai and traded as Knowledge Atlas Technology, jumped 13.4%.

   A six-month lock-up period for "cornerstone" investors following its January 
trading debut in Hong Kong expires this week. China National Radio reported 
late Tuesday that nearly 70% of Zhipu's cornerstone investors are committed to 
stay on, despite previous worries that the lock-up period expiration could 
trigger a sell-off.

   Zhipu's share price has risen more than 1,300% since its debut.

   ___

   AP Business Writers Matt Ott, Chan Ho-him and Elaine Kurtenbach contributed 
to this report.

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