Michael Nagle | Bloomberg | Getty Images
The Dow Jones Industrial Average shed 382 points, or 0.8%. The S&P 500 was down 0.9%, while the Nasdaq Composite traded 1.3% lower.
Trump has set an 8 p.m. ET deadline for the U.S. and Iran to strike a deal on reopening the Strait of Hormuz, otherwise the U.S. will destroy Iran’s power plants and bridges. However, his latest comments and new reports suggest an agreement by then is unlikely, as he said in a Truth Social post Tuesday: “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.”
The president still left room for the possibility that the U.S. wouldn’t end up attacking the Middle Eastern country after the deadline, adding that “now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen, WHO KNOWS?”
Tensions have already been ramping up in the leadup to the deadline. The Wall Street Journal and NBC News, citing U.S. officials, reported that the U.S. carried out strikes on Kharg Island overnight.
Negotiators aren’t optimistic a deal between the U.S. and Iran can be reached before Trump’s deadline, The Wall Street Journal also reported. To be sure, Iranian state media indicated that talks between the two sides were not closed.
The latest developments depressed equity prices and bolstered oil. West Texas Intermediate crude futures were up 3% at above $116 per barrel. International Brent crude futures advanced 0.8% to above $110 a barrel.
While Facet’s Tom Graff believes investors should assume that oil prices will stay “significantly higher” than the levels they were at prior to the war, he ultimately views Iran leaving the Strait closed as a “negotiation ploy.” Even though the country might want to reopen it on its terms rather than the U.S.’, no one – including Iran – benefits from a permanent closure there, he said.
“I just don’t think it’s sustainable that the Strait remains closed for months and months and months,” the chief investment officer told CNBC. “Something is going to have to give there at some point.”
Broadcom was a bright spot of the session, rising 3% on the heels of the company signing expanded artificial intelligence deals with Google and Anthropic.