US equity indexes were off session lows ahead of Tuesday's close after President Donald Trump opened the door for the Navy to provide a safety cover for carriers passing through the Strait of Hormuz.

The Nasdaq Composite slumped 1% to 22,518.1, with the Dow Jones Industrial Average down 0.8% to 48,518.5 and the S&P 500 lower by 0.9% to 6,817.6.

"Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf," Trump said in a social media post on Tuesday.

The CBOE Volatility Index, also known as the fear gauge, was still up 8.2% to 23.21, after catapulting to an intraday high of 28.15, its strongest level since April 2025.

"Oil is Iran's weapon of choice, and it is aimed straight at President [Donald] Trump's Midterm elections," said Bjarne Schieldrop, chief analyst for commodities at SEB Research. "An important part of the battlefield for Iran is thus at the US gasoline pump."

West Texas Intermediate crude oil futures traded up 3.7% to $73.85 a barrel, after trading more than 8% higher earlier in the session.