Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 3, 2026. REUTERS/Brendan McDermid
Brendan Mcdermid | Reuters
Stocks had another wild session on Tuesday as concerns around a prolonged U.S.-Iran conflict rattled markets, though comments from President Donald Trump appeared to somewhat assuage those worries.
The Dow Jones Industrial Average lost 403.51 points, or 0.83%, and ended at 48,501.27. The S&P 500 slipped 0.94% to close at 6,816.63, while the Nasdaq Composite shed 1.02% to settle at 22,516.69. At their lows of the day, the S&P 500 lost 2.5%, and the Nasdaq was down about 2.7%. The 30-stock Dow was down more than 1,200 points, or around 2.6%, at its nadir.
Dow Jones Industrial Average, 2-day
Trump said Tuesday afternoon that the U.S. Navy will escort tankers through Strait of Hormuz, if necessary.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” Trump said in a Truth Social post. “The United States’ ECONOMIC and MILITARY MIGHT is the GREATEST ON EARTH — More actions to come.”
Brent crude oil, the global benchmark, settled up 4.71%. That was a far cry from its high of the day and follows a 6% spike Monday. WTI crude also came off its high and settled up 4.68%. It also posted a 6% gain in the previous session. Both had been up more than 9%.
The day’s initial jump in energy prices had boosted Treasury yields on fears it may cause inflation to flare back up, just as U.S. investors are banking on more Federal Reserve rate cuts to boost the economy. However, yields later pared their advance along with oil prices.
Trade concerns had worsened after the Iranian Revolutionary Guard commander said the Strait of Hormuz — the world’s most vital transit route for crude oil — is closed and that Iran would set ablaze ships attempting the route. Trump’s warning that the conflict could continue for more than four weeks also exacerbated jitters. There were other signs of the conflict deepening as it enters its fourth day:
- The U.S. embassy in Riyadh, Saudi Arabia’s capital was hit by drones as Iran upped its attacks on the country. The State Department ordered evacuations of personnel from Bahrain, Iraq and Jordan.
- Tehran-backed Hezbollah attacked Tel Aviv with missiles and drones.
- Concerns are growing about how long Gulf states like the UAE can hold off the barrage of Iran missiles and drones with their air defenses.
“I do think the possibility of a more prolonged mission can weigh on markets for the next several weeks,” Jeffrey O’Connor, U.S. head of equity market structure at Liquidnet, said to CNBC, citing the possibility of high oil prices becoming sticky and investors having to navigate future moves in inflation, yields and interest rate cut expectations.
“Historically, the U.S. market is able to overlook a geopolitical shock like this, but that said, the Strait of Hormuz is closed,” he continued. Given that about 20% of the world’s oil consumption moves through the Strait, O’Connor added that its continued closure “can’t be overlooked.”
Each of the S&P 500 sectors were in the red on Tuesday. Materials and industrials saw the biggest losses on fears that higher oil prices and borrowing costs could weigh on the U.S. economy.
Several major tech stocks, such as Nvidia, that led the Monday intraday comeback were lower on Tuesday. U.S. memory stocks were also under pressure and followed the notable declines seen in memory chip stocks in South Korea. Additionally, shares of Blackstone fell 3.8% after the Financial Times reported that its private credit fund saw $1.7 billion in net outflows in the first quarter.
There were little places to hide Tuesday with gold prices also sharply lower after Monday’s gains. The CBOE Volatility index, Wall Street’s fear gauge, jumped to its highest levels since November.
