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Trump speaks about the Iran war from the White House on April 1. (Doug Mills/The New York Times via AP Pool)

Stocks recovered most of their earlier losses as volatility returned to Wall Street after two days of solid gains.

The S&P 500 fell 0.2% after slumping as much as 1.5% in early trading April 2. The Dow Jones Industrial Average shed 154 points, or 0.3% as of 12:35 p.m. Eastern. The Nasdaq composite fell 0.3%. Stocks in Europe pared their losses.

Oil prices remained elevated although down from earlier highs. The price for a barrel of U.S. crude rose close to $114 a barrel at one point.

The unsettled trading follows a national address late April 1 from President Donald Trump, where he��vowed the U.S. will continue to attack Iran��and failed to offer a clear timetable for ending the conflict in the Middle East. Those comments appeared to dim the hopes for a near-term conclusion to the war that had pushed stocks higher through most the week.

Major indexes are still on track to close out the week with gains. April 2 is the last day of trading on Wall Street this week with with the stock market closed on Good Friday.

Crude oil prices have been the main force behind the sharp swings for stocks globally. Shipping traffic has been severely curtailed��in the Strait of Hormuz, where a fifth of the world’s traded oil passes through during peacetime.

WTI crude oil up over 8%
ULSD up over 11%
RBOB (gasoline) up nearly 7%
you ready for more gas and diesel price increases? — Patrick De Haan (@GasBuddyGuy)

The price of Brent crude, the international standard, jumped 6.5% to $107.72. per barrel. Benchmark U.S. crude rose 11.3% to $111.44 per barrel. Prices had been sliding back toward $100 per barrel prior to Trump’s address on April 1. The U.S. only relies on the Persian Gulf for a fraction of the oil it imports, but oil is a commodity and prices are set in a global market. A disruption anywhere affects prices everywhere.

Markets have been broadly sliding since the war began, with indexes often rising and falling sharply along with statements from Trump about the direction of the war. Just on March 30, the S&P 500 briefly neared a 10% drop from its record, a steep-enough fall that professional investors have a name for it: a “correction. The index gained ground March 30 and April 1 on hope that the war could end soon.

“For markets, a prolonged conflict increases the risk of sustained pressures on inflation, global growth, interest rates, and equity valuations,” wrote Adam Turnquist, chief technical strategist for LPL Financial, in a note to investors.

READ MORE: Nations Consider Political, Diplomatic Ways to Reopen Hormuz

Airlines and other travel-related companies were among the biggest losers on April�� 2. United Airlines fell 4.1% and Carnival shed 4%.

Tesla fell 4.4% after a report showing that��sales over the past three months��fell short of analysts' expectations.

Several big technology stocks gained ground to help offset losses elsewhere in the market. Intel jumped 3% and Advanced Micro Devices rose 1.6%.

Treasury yields remained relatively steady in the bond market. The yield on the 10-year Treasury fell to to 4.30% from 4.32%.

Wall Street is worried that higher energy prices are adding to already stubbornly high inflation. Rising fuel prices take a bigger chunk out of consumers' wallets in several ways. Directly, gasoline prices in the U.S. have surged more than 33% from a month ago to average $4.08 per gallon, according to the auto club AAA.

Indirectly, rising fuel prices tend to make a wide range of services and goods more expensive. Flights become more expensive as airlines raise ticket prices to offset rising fuel costs. Consumer goods become more expensive as shipping and transportation costs rise.

Inflation has been stubbornly above the Federal Reserve's 2% target. The war and its corresponding surge in energy prices effectively pushes inflation higher and that has dashed hopes for the Fed to cut interest rates. Wall Street had hoped for the central bank to cut rates in order to help offset a weakening job market. Lower interest rates could help stimulate the economy by lowering borrowing costs, but they also risk worsening inflation.

Traders came into 2026 forecasting several cuts to the Fed's benchmark interest rate, which influences rates for mortgages and other loans. They are now expecting the benchmark rate to remain steady this year.

The war with Iran has overshadowed many of the other moving pieces within the economy that the Fed and Wall Street have been monitoring. It remains a mixed picture. Reports this week revealed that consumers remain confident and are still spending, though inflation remains a big concern. A report April 2 showed that mortgage rates continue climbing, posing an obstacle for prospective home buyers. Another update April 3 will give a more detailed view of the job market.

Associated Press journalists Chan Ho-Him and Matt Ott contributed to this report.