At midday trading on Tuesday in the US, major stock indices showed mixed performance. The Dow Jones Industrial Average turned positive, while losses in the Nasdaq and S&P 500 indices narrowed. Market participants continued to monitor developments in oil prices and the evolving situation in the Middle East.
The Dow Jones Industrial Average rose by 44.94 points, or 0.10%, to 46,253.41. The Nasdaq Composite declined by 108.31 points, or 0.49%, to 21,838.45. The S&P 500 index decreased by 3.59 points, or 0.05%, to 6,577.41.
US stocks had rebounded in the previous trading session, fueled by renewed hopes for a potential resolution to tensions between the US and Iran. Shortly before the market opened on Monday, former US President Donald Trump posted on his Truth Social platform, stating that the US and Iran had engaged in "very good and productive conversations aimed at a full and complete resolution of our hostilities in the Middle East." This announcement triggered a sharp surge in major indices, with the Dow Jones briefly climbing over 1,100 points intraday. A concurrent cooling of oil prices provided additional support for the stock market rally.
However, Iranian state media subsequently reported that no direct talks had taken place between the two nations. This report caused the earlier stock market gains to partially recede.
Citing informed sources, a prominent financial news outlet reported that prior to Trump's statement, the US had indeed conducted a series of behind-the-scenes discussions with Iran through Middle Eastern intermediaries. Despite this, the report indicated that Arab mediators privately expressed skepticism about the likelihood of a swift agreement, citing significant remaining differences between the parties.
Furthermore, it is evident that investors are growing increasingly confused about the effectiveness of peace negotiations. This confusion stems from the fact that military confrontations between Israel and Iran continued even after former President Trump's comments on Monday.
Oil prices resumed their upward trajectory on Tuesday. The global benchmark Brent crude futures rose more than 1%, trading above $101 per barrel. West Texas Intermediate crude futures increased by 3%, surpassing $90 per barrel.
Despite Trump's optimistic tone, Scott Chronert, US equity strategist at Citigroup, suggested that investors are not yet out of danger. He stated, "We still have work to do regarding how oil prices will ultimately settle and how those levels will impact the underlying economic picture. So, while we view the current 'down 5% to 10%' narrative as acceptable for now, we must remain alert that risks persist and remain quite significant."
Over the weekend, Trump had threatened attacks on Iranian power plants if the Strait of Hormuz was not reopened. Iran responded by warning it would target US infrastructure in retaliation.
In pre-market trading on Tuesday, shares of Apollo Global Management fell more than 3% after the company disclosed plans to limit redemptions from its private credit funds.