U.S. stocks remained volatile on Tuesday as investors faced uncertainty over the escalating conflict between the United States and Iran. President Donald Trump has set a new deadline of 8pm ET for the Strait of Hormuz, warning that “entire civilization” will be wiped out tonight.
Wall Street is struggling to find direction
The S&P 500 was down about 0.3% in the afternoon after falling 1.2% earlier, and the Dow Jones Industrial Average was down about 165 points (0.4%). The Nasdaq 100 also fell about 0.5%.
Market volatility remains volatile and unpredictable. In the first hour of trading alone, the Dow Jones fluctuated between a gain of 74 points and a loss of 425 points, highlighting the fragility of investor sentiment.
Read more: ‘Civilization does not die by bombing’: Iranian embassy responds to Trump’s threats
Six of the 11 sectors were in the red, led by consumer-facing stocks, while volatility remained elevated, with the CBOE Volatility Index hovering around 26.
Oil prices continue to soar
The biggest reaction has been in energy markets. Crude oil prices surged as the conflict disrupted production and shipping routes in the Persian Gulf.
U.S. crude rose 1.3% to $113.82 a barrel, while Brent climbed above $110, well above pre-war levels of nearly $70.
The Strait of Hormuz remains at the center of the crisis, with about a fifth of the world’s oil supplies passing through the waterway.
U.S. stocks remained volatile on Tuesday as investors faced uncertainty over the escalating conflict between the United States and Iran and President Donald Trump set new deadlines related to the Strait of Hormuz.
Read more: White House rules out Iran acquiring nuclear weapons amid uncertainty over peace talks
When will the stock market stabilize?
Investors are now closely watching a decisive outcome, whether diplomatic or military, as a key trigger for market stability.
Paul Christopher, global head of investment strategy at Wells Fargo Investment Institute, said, “Investors are likely to remain uneasy, with markets unsure of a trend, until a clear outcome later tonight: a deal, intensified U.S./Israeli strikes, or escalating rather than proportional Iranian retaliation.”
Industry trends and stock-specific action
Rising oil prices hit companies with high fuel costs hardest. Norwegian Cruise Line shares fell 3.8%, and United Airlines shares fell 2.9%.
Retailers sensitive to consumer spending also struggled, with Dollar Tree down 4.7% and Dollar General down 1.8% as U.S. gasoline prices jumped to $4.14 a gallon.
Cryptocurrency-related stocks weakened along with Bitcoin, with Coinbase Global down 1% and Strategy down 2.7%.
However, gains in health care stocks helped limit broader losses. Insurer shares rose after the Centers for Medicare and Medicaid Services approved a 2.48% rate hike in 2027. UnitedHealth shares soared 10.5% and Humana shares rose 9.2%.
Meanwhile, Universal Music Group shares rose 11.4% after billionaire Bill Ackman proposed acquiring the company.
Gold, silver and other metals
Meanwhile, gold prices were higher on Tuesday. Spot gold was up 0.8% at $4,684.59 an ounce as of 2:33 pm ET (1833 GMT). U.S. gold futures ended unchanged at $4,684.70.
According to Reuters, Jim Wyckoff, senior analyst at Kitco Metals, said, “The gold market is at a standstill ahead of the deadline at 8pm ET tonight. The gold market is at a standstill as traders wait and see what will happen as the event may have an impact.”
Spot silver fell 1% to $72.03 an ounce, platinum fell 2% to $1,939.15 an ounce and palladium fell 2% to $1,455.63 an ounce.
What’s next for the market?
One expert added that Wall Street is likely to remain volatile on oil prices and inflation risks until there is clarity on the geopolitical situation.
“Even if tensions ease, normalization will lag, leading to the risk of higher prices and potential product shortages,” wrote Salih Yilmaz, senior industry analyst at Bloomberg Intelligence.
