US stocks traded mostly unchanged on Tuesday as investors monitored volatile oil prices and closely followed developments in the escalating conflict involving Iran.
The Dow Jones Industrial Average slipped 62 points, or 0.1%. The S&P 500 hovered near the flatline, while the Nasdaq Composite gained 0.2%.
Energy markets remained the primary focus for investors after a sharp run-up in crude prices earlier in the week.
West Texas Intermediate futures were down about 6% to roughly $89 per barrel, while international benchmark Brent crude declined 7% to around $92 per barrel.
Despite the pullback, oil prices remained near the $90 mark, reflecting persistent uncertainty about global energy supply amid geopolitical tensions.
Trump signals progress in Iran campaign
President Donald Trump said Monday evening that US forces were making significant progress in their military campaign.
“We’re achieving major strides toward completing our military objective,” Trump said during remarks at his golf club near Miami.
He also emphasised that the administration was focused on maintaining global energy supply, stating: “We are also focused on keeping energy and oil flowing to the world.”
On Tuesday, US Defense Secretary Pete Hegseth indicated that operations were intensifying, saying, “Today will be our most intense day of strikes inside Iran,” and adding that Iran was “badly losing.”
Meanwhile, Mohammad-Bagher Ghalibaf, speaker of Iran’s parliament, wrote on social platform X that the country was not seeking a ceasefire.
Oil moves continue to drive markets
Stocks staged a strong rebound on Monday after Trump suggested in comments to CBS that the conflict might soon conclude.
The president said, “the war is very complete, pretty much,” and told CBS News that US forces were progressing faster than his previously estimated four-to-five-week timeframe.
Trump also said he was “thinking about” taking control of the Strait of Hormuz, a key shipping route for global crude supplies.
Those comments triggered a sharp reversal in oil prices and supported a rally in equities.
G7 discusses strategic oil reserves
Global policymakers are also examining ways to stabilise energy markets.
Energy ministers from the Group of Seven nations — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — were scheduled to meet virtually on Tuesday to discuss the potential release of strategic oil reserves.
The discussions followed a meeting among G7 finance ministers on Monday.
Fatih Birol, executive director of the International Energy Agency, said the conflict was “creating significant and growing risks for the market.”
Birol noted that policymakers had discussed several options to stabilise markets, including the possible release of emergency oil stocks held by IEA members.
Oil market risks remain elevated
Industry leaders have warned that a prolonged disruption could have severe consequences for global energy markets.
Amin Nasser, chief executive officer of Saudi Aramco, said during an earnings call that the conflict could have “catastrophic consequences for the world’s oil market.”
Analysts have also warned that prices could climb significantly if the situation escalates.
Paul Gooden, head of global natural resources at Ninety One, said oil prices could rise above $120 per barrel if supply disruptions persist.
“Oil prices could spike further until higher prices begin to curb demand,” Gooden wrote in a note Tuesday.
“At that point, consumers and businesses change behaviour: driving less, flying less, or shifting to alternative energy sources. That process of ‘demand destruction’ has historically acted as a natural ceiling for sustained price spikes.”
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