Major United States benchmark averages edged lower on Tuesday (Wednesday AEDT), surrendering part of the previous session’s gains as oil prices resumed their upward trajectory and geopolitical tensions in the Middle East continued to unsettle investors.
The Dow Jones Industrial Average slipped 84.4 points or 0.2% to 46,124.1, the S&P 500 declined 24.6 points or 0.4% to close at 6,556.4, while the Nasdaq Composite lost 184.9 points or 0.8% to finish at 21,761.9.
President Trump stated on Tuesday that the United States is “in negotiations right now” with Iran, adding that “the other side, I can tell you, they’d like to make a deal”.
His remarks followed a Truth Social post a day earlier in which he described discussions between the two nations as “very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East”.
Those comments had lifted major indices by more than 1% in the prior session. However, Iranian state media denied that direct talks were taking place, fuelling uncertainty among market participants.
Confusion over the status and effectiveness of diplomatic efforts has persisted, particularly as hostilities between Israel and Iran have continued.
Reports also indicated that the Pentagon is considering deploying approximately 3,000 additional troops to the region, although no final decision has been made.
Despite the uncertainty, there were tentative signs of diplomatic support, with Pakistan reportedly offering to facilitate negotiations between the two sides.
Oil markets were a key driver of Tuesday’s market moves. Prices rebounded sharply after the previous session’s decline, with Brent crude rising 4.6% to settle at $104.49 per barrel. West Texas Intermediate gained 4.8% to close at $92.35 per barrel.
The energy sector emerged as the top performer within the S&P 500, advancing 2% on the day. This pushed its gains for the month above 9%, making it the only sector in positive territory over that period.
In contrast, concerns resurfaced in the private credit space after reports that Ares Management imposed a 5% limit on redemptions in one of its funds amid a surge in withdrawal requests.
Shares of Ares fell 1%, while Apollo edged 0.7% higher. Meanwhile, Blackstone and Carlyle declined 1.3% and 0.9%, respectively.
Economic data added to the cautious tone, with S&P Global's U.S. flash purchasing managers' index (PMI) survey indicating that U.S. business activity slowed to an 11-month low in March.
The data pointed to rising input costs, particularly for energy, as a key factor weighing on activity.
Among individual stocks, Estée Lauder shares plunged 9.9% after the company revealed it is in discussions over a possible merger with Spanish beauty group Puig Brands.
On the bond markets, yields continued to climb, with the 10-year Treasury yield rising 0.4% to 4.368% and the 2-year yield increasing 1.2% to 3.904%.
