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BEIJING (AP) — Japan’s stock benchmark soared 4% and other Asian markets surged Thursday after oil prices dropped, easing fears inflation was set to accelerate.

Wall Street’s S&P 500 index rose 2.6% for its biggest daily gain in 12 years as prices swing wildly amid uncertainty about the impact of Russia’s war on Ukraine.

Markets rallied after the price of U.S. crude fell 12%, easing a run-up caused by fears the war might disrupt Russian supplies. Brent crude, the price basis for international oil trading, fell 13.2% in its biggest daily decline in almost two years.

Economists said the changes were influenced by shifts in futures contracts and other market factors, not war developments. They warned markets will stay volatile while Russian and Ukrainian diplomats prepare to meet for negotiations.

“Markets seem to have latched onto a couple of slightly less dismal clues as an excuse to rally hard,” said ING economists in a report. “The basis for that optimism — it’s actually pretty thin.”

The Nikkei 225 in Tokyo rose to 25,697.20 and the Shanghai Composite Index gained 1.6% to 3,307.68. The Hang Seng in Hong Kong advanced 1.7% to 20,978.26.

The Kospi in Seoul jumped 2.1% to 2,678.11 as trading resumed after a day off for South Korea’s presidential election.

Sydney’s S&P-ASX 200 added 1.4% to 7,150.50. New Zealand and Southeast Asian markets also advanced.

Oil prices rebounded but rose by only a few cents per barrel after Wednesday’s plunge of more than $15.

Benchmark U.S. crude rose 36 cents to $111.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $15 to $108.70 on Wednesday. Brent advanced 26 cents to $116.12 per barrel in London. It lost $16.84 the previous session to $111.14.

On Wall Street, the S&P 500 rose to 4,277.88. The Dow Jones Industrial Average added 2% to 33,286.25 and the Nasdaq composite gained 3.6% to 13,255.55.

On Wall Street, the gains were broad-based, with nearly 85% of the stocks in the S&P 500 rising, led by technology companies. Some of the strongest moves came from airlines, travel companies and other stocks that bounced back from steep drops on worries about fuel costs and the economy.

Among Wednesday’s few decliners were oil-related companies. Halliburton fell 5.2%, though it still is up 52% for 2022.

Investors are watching the war because Russia is the No. 2 global oil exporter after Saudi Arabia and the No. 3 supplier of nickel used in making electric car batteries and stainless steel. Russia and Ukraine are big wheat exporters.

The White House has banned imports of Russian crude to punish the Kremlin.

European stocks rallied Wednesday even more than the U.S. market. Germany’s DAX jumped 7.9% and France’s CAC 40 rose 7.1%.

European economies rely more heavily on Russian oil and gas supplies and face a bigger potential shock from the war. That might prompt European governments to use more economic stimulus, which pushes up stock prices.

Ahead of Russia’s Feb. 24 invasion of Ukraine, investors already were uneasy about plans by the Federal Reserve and other central banks to try to cool inflation by withdrawing ultra-low interest rates and other stimulus.

U.S.Labor Department reported Wednesdaythat businesses posted a near-record level of open jobs, 11.3 million, in January, a trend helping push up worker’s pay and adding to inflationary pressures in the U.S. economy

Investors expect Fed policymakers to vote at a meeting next week to raise its benchmark short-term rate by one-quarter of a percentage point. It would be the first such increase since 2018.

In currency markets, the dollar rose to 116.13 yen from Wednesday’s 115.85 yen. The euro declined to $1.1049 from $1.1077.