Stocks fell on Tuesday as President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz approached, with hopes of an agreement fading.
The Dow Jones Industrial Average shed 101 points, or 0.2%. The S&P 500 was down 0.3%, while the Nasdaq Composite traded 0.4% lower.
Trump has set an 8 p.m. ET deadline for the U.S. and Iran to strike a deal on reopening the Strait of Hormuz, otherwise the U.S. will destroy Iran’s power plants and bridges. However, his latest comments and new reports suggest an agreement by then is unlikely, as he said in a Truth Social post Tuesday: “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.”
The president still left room for the possibility that the U.S. wouldn’t end up attacking the Middle Eastern country after the deadline, adding that “now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen, WHO KNOWS?”
Tensions have already been ramping up in the leadup to the deadline, as The Wall Street Journal and NBC News, citing U.S. officials, reported that the U.S. carried out strikes on Kharg Island overnight.
The latest developments depressed equity prices and bolstered oil. West Texas Intermediate crude futures were up more than 2% at above $115 per barrel. International Brent crude futures advanced 1% to above $111 a barrel.
The Wall Street Journal has also reported that negotiators aren’t optimistic a deal between the U.S. and Iran can be reached before Trump’s deadline.
“We agree with that sentiment – a full and final agreement won’t be in place by tonight,” wrote Adam Crisafulli of Vital Knowledge. “However, since the options facing Trump are so bad, since the US has achieved the bulk of its strategic objectives, since negotiations are still ongoing, and since Iran has made some (small) concessions on Hormuz (the Iraq news from the weekend was meaningful), it’s likely that the Pentagon and IDF don’t commence a scorched search campaign against civilian infrastructure targets later today.”
Broadcom was a bright spot of the session, rising 4% on the heels of the company reaching expanded chip deals with Google and Anthropic.