US stocks ended mixed on Tuesday as investors navigated heightened geopolitical uncertainty tied to President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz, with late-session optimism helping broader markets recover from earlier losses.
The Dow Jones Industrial Average fell 85.42 points, or 0.18%, to close at 46,584.46.
Meanwhile, the S&P 500 rose 0.08% to 6,616.85, and the Nasdaq Composite gained 0.10% to 22,017.85, both extending their winning streaks to five consecutive sessions.
Late rally lifts markets on diplomatic hopes
Stocks rebounded sharply in the final hour of trading after comments from Pakistan’s Prime Minister Shehbaz Sharif signaled potential diplomatic progress.
Sharif urged Trump to extend the Iran deadline by two weeks and called on Tehran to reopen the Strait of Hormuz temporarily as a goodwill gesture.
This development helped reverse earlier declines, as investors responded to the possibility of a last-minute de-escalation.
“Investors are calibrating as they try to read into the president’s messaging and predict the degree (to which) he will follow through with some of his rhetoric in terms of the ultimatum,” said Matthew Keator, managing partner at the Keator Group, a wealth management firm in Lenox, Massachusetts in a Reuters report.
“How much of it is posturing, and how much of it is telegraphing what he will actually do?” he added.
White House press secretary Karoline Leavitt confirmed that Trump had been made aware of the proposal and would respond, leaving markets in a wait-and-see mode.
Oil volatility and inflation fears weigh on sentiment
Markets remained under pressure for much of the session as geopolitical tensions drove oil price volatility and raised concerns about inflation.
U.S. crude oil prices initially surged before paring gains. West Texas Intermediate settled up 0.5% at $112.95 per barrel, while Brent crude edged down 0.5% to $109.62.
The prolonged closure of the Strait of Hormuz—through which roughly one-fifth of global oil supply flows—has disrupted energy markets since late February.
Chicago Fed President Austan Goolsbee warned that the conflict could trigger a stagflationary shock, combining higher inflation with slower economic growth and complicating monetary policy decisions for the Federal Reserve.
At the same time, economic data added to the cautious tone. A Commerce Department report showed that new orders for durable goods declined more than expected in February, even before the escalation of the conflict.
Investors are now closely watching upcoming inflation data, particularly the consumer price index report, for further clues on the economic impact of the war.
Sector moves and corporate highlights
Sector performance was mixed, with communication services leading gains while consumer staples lagged.
Transport and semiconductor stocks outperformed, reflecting selective risk appetite. Broadcom gained over 6% after announcing a long-term AI-related deal with Alphabet.
Healthcare stocks also rallied after a government policy update.
UnitedHealth Group surged 9.4%, while Humana and CVS Health rose 7.9% and 6.7%, respectively, following an increase in Medicare Advantage payment rates.
On the downside, Apple fell 2.1% after reports of engineering setbacks in its anticipated foldable device.
Market breadth was slightly negative, with declining stocks outnumbering advancers on both the NYSE and Nasdaq.
Trading volume came in below the recent average, suggesting cautious participation amid ongoing geopolitical uncertainty.
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