The S&P 500 rose on Tuesday as Wall Street continued the momentum seen in the previous session amid developments in the Iran war.
The broad market index closed up 0.25% at 6,716.09, and the Nasdaq Composite rose 0.47% to end at 22,479.53. The Dow Jones Industrial Average added 46.85 points, or 0.1%, to end at 46,993.26.
Unstable oil prices and the consequences of the Iran war continue to affect investor sentiment. Oil prices continued to rise on Tuesday, with global benchmark Brent crude up 3% – firmly above the $100 mark.
Despite rising oil prices, the S&P 500 consumer staples group rose 1% on the day, led by gains in Expedia Group and Booking Holdings. Strong revenue guidance from Delta and American airlines boosted those names. However, the sector is down more than 2% this month.
Energy was the index’s leading sector, adding just over 1%. With this move, monthly gains since the beginning of the year amount to more than 4%.
The recovery in oil prices came after President Donald Trump suggested on Monday that a coalition to protect ships along the Strait of Hormuz was still in the works. Trump then said in a post on Truth Social on Tuesday that the US does not need help from NATO or other countries to implement the escort plans.
“Thankfully, we have decimated the Iranian military,” Trump said in the post. “Due to the fact that we have had such military success, we no longer ‘need’ or want help from NATO countries – WE NEVER WANTED IT.”
Stocks retreated from their highs after the announcement, while the price of crude oil rose, suggesting investors were hoping for a coalition, SEEbiz reports.
“Investors remain hopeful that a quick and relatively painless resolution to the situation will be found and will prove to be the latest in a long, relatively unbroken line of bearish buying opportunities,” said Steve Sosnick, chief strategist at Interactive Brokers. “There’s also a fair degree of residual FOMO, which is why … small spikes turn into relatively significant upside moves, even if the underlying reason seems to be lacking.”
Oil prices have risen since the start of the US-Israeli attacks on Iran on concerns that a prolonged closure of the Strait of Hormuz could lead to a global disruption in energy supplies.
