Markets brace for Trump's Iran ultimatum
US equity markets ended mixed on Tuesday after a late-day rebound as President Donald Trump's deadline for Iran to reopen the Strait of Hormuz arrived, with the Dow Jones Industrial Average leading earlier losses and the broader S&P 500 swinging between losses and a small gain as uncertainty built through the session, according to MarketWatch.
Crude oil climbed above $117 a barrel, according to NBC News, as traders priced in the possibility of direct US military action. Trump had threatened to bomb Iranian power plants if the deadline passed without compliance, a threat that AP News reported was being closely tracked by market participants. The Wall Street Journal noted that oil jumped further after the US raised the temperature on Iran during the session.
Earlier in the day, Dow futures had jumped 300 points on hopes for a last-minute deal before Trump's deadline, according to CNBC, though that optimism faded as no resolution was publicly announced.
The prior session offered a contrasting picture: on April 6, stocks and oil edged higher as investors parsed last-minute diplomatic signals, with the S&P 500 posting a fourth consecutive winning session on hopes for a ceasefire, according to the Wall Street Journal and Reuters. That optimism gave way as the Tuesday deadline drew closer with no resolution publicly announced.
Broadcom provided a rare bright spot in Tuesday's session, according to Investor's Business Daily, offering some support to the technology sector amid otherwise broad-based pressure.
The Strait of Hormuz carries roughly a fifth of global oil supply, making any sustained closure a direct supply shock to energy markets. With negotiations ongoing and Trump's threats unresolved, traders were unwilling to extend the previous session's risk appetite.
