Stocks Slip Despite Oil Price Pullback

US stocks eased lower Tuesday as investors waited for the next signal on when the war with Iran may end.

• The S&P 500 fell 14.51 points, or 0.2%, to 6,781.48 after giving up an early gain.
• The Dow Jones Industrial Average fell 34.29 points, or 0.1%, to 47,706.51.
• The Nasdaq composite was essentially flat: It rose 1.16 points, or less than 0.1%, to 22,697.10.

Oil prices pulled back from where they were in the final moments of the US stock market's trading late Monday. That was after they plunged from nearly $120 per barrel toward $90 on hopes for a quick end to the war, the AP reports. Stocks rose in Asia and Europe in their first chance to trade after that fall for oil prices.

The price for a barrel of Brent crude, the international standard, settled at $87.80. That's down 11.3% from its settlement price the day before. Much of that decline happened before the US stock market finished trading on Monday. That's why the drop did not give much of a boost to US stocks Tuesday. A barrel of benchmark US crude also closed lower, settling 11.9% below where it was late Monday, at $83.45.

• Oil prices plunged Monday afternoon from a high of nearly $120 per barrel, its most expensive level since 2022, after President Trump told CBS News he thinks "the war is very complete, pretty much." That raised hopes that the war may end sooner than later, which could allow oil to flow freely again from the Middle East to customers around the world.
• But Trump's comments later Monday, after the US stock market finished trading, were not as clear. And a spokesperson for Iran's paramilitary Revolutionary Guard said that "Iran will determine when the war ends." Iran launched new attacks Tuesday at Israel and Gulf Arab countries, keeping pressure on the Middle East in a war started by Israel and the United States. That has Wall Street waiting for the next clue about how long the war may last.

• One point where Trump remained clear was his desire to keep the Strait of Hormuz open. The war has effectively blocked much of the waterway off Iran's coast, where a fifth of the world's oil sails on a typical day. That's been a central reason for oil prices' extreme swings recently, which have dominated other financial markets and raised worries about the global economy. "If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far," Trump said in a posting on Truth Social late Monday.
• "The outlook for oil right now is about as binary as it gets," according to Hakan Kaya, senior portfolio manager at Neuberger Berman. "Either the Strait of Hormuz reopens and you see a massive unwind of the risk premium, or it stays shut and we are looking at the largest supply disruption in modern history. There is no middle ground, and that is why putting a number on it is almost irresponsible."

• If oil prices do stay high for long, household budgets already stretched by high inflation could break under the pressure. Companies would see their own bills jump for fuel and to stock items on their store shelves or in their data warehouses. It all raises the possibility of a worst-case scenario for the global economy, "stagflation," where growth stagnates and inflation remains high.
• On Wall Street, Vertex Pharmaceuticals leaped 8.3% for the biggest gain in the S&P 500 after reporting encouraging trends from a trial for its treatment for a life-threatening kind of kidney disease. West Pharmaceutical Services sank 5.7% after Eric Green said he'll retire as CEO and chair once the board finds and hires his successor.