The S&P 500 edged lower on Tuesday, reversing some of the sharp gains seen in the previous session, as crude oil prices rose again as the war with Iran entered its fourth week.
The broad market index traded lower by about 0.4%, while the Dow Jones Industrial Average lost 95 points, or 0.2%. The Nasdaq Composite fell 0.9%.
President Donald Trump said on Tuesday that we are “negotiating right now” on the conflict with Iran, adding that “the other side, I can tell you, wants to get a deal.”
It comes after Trump said in a post on Truth Social on Monday that the US and Iran had “very good and productive discussions regarding the full and total resolution of our hostilities in the Middle East.” The announcement sent the major indexes up more than 1% on the previous day. Iranian state media reported, however, that there had been no direct talks between the two countries.
Confusion has grown among Wall Street investors over how effective the talks to end the war have been, as Israel and Iran have since continued to trade blows following the president’s comments on Monday, according to Israeli officials, SEEbiz reported. The Pentagon is also reportedly planning to deploy around 3,000 troops to the Middle East, although the US has not yet made a decision to send troops into the field in Iran.
Oil prices continued to rise on Tuesday after falling in the previous session. Global benchmark Brent crude rose more than 4% to trade above $104 a barrel. The price of West Texas Intermediate crude oil jumped 4% to reach above $92 a barrel.
Energy was also one of the best-performing S&P 500 sectors during the session, rising 2%. This means that her monthly gains are greater than 9%. It is the only S&P 500 sector in positive territory during that time frame.
“Right now we’re seeing a lot of uncertainty in Iran, and as a result I think the market is going sideways, with quite a bit of underperformance, until that visibility improves,” said Terry Sandven, chief equity strategist at US Bank Asset Management.
“If the S&P [500] close below 6500, you’ll probably see some more decline.”
Investors were offered other encouraging signs on Tuesday, of course, as Pakistan offered to facilitate talks between the two countries.
Over the weekend, Trump threatened to attack Iran’s power plants if the Strait of Hormuz is not reopened. Iran, on the other hand, said it would target American infrastructure as a retaliatory tactic.
