Dow pares early losses as oil climbs on widening Iran war worries

Summary Continued Prose

Stocks slid Tuesday after a sell-off that began in Asia and intensified early in U.S. trading, but the biggest market moves eased as the day progressed, according to Associated Press reporting. The market’s shift came as oil prices pushed higher again on worries about a widening conflict involving Iran, including risks tied to shipping through the Strait of Hormuz. By the close, investors were left with declines that were still meaningful but smaller than the losses seen earlier in the session.

Oil’s rise fed directly into what investors focused on most: how higher fuel prices could worsen inflation and tighten financial conditions. More expensive fuel can reduce money available to households and raise costs for companies, which can affect earnings, AP said. Brent crude briefly jumped above $84 early, then settled at $81.40, up 4.7%, while benchmark U.S. crude rose 4.7% to $74.56.

Tuesday’s energy-driven worries followed an exchange of attacks that widened the target set in the conflict, AP reported. The sell-off also reflected anxiety about the Strait of Hormuz, where roughly a fifth of the world’s oil passes. AP said Iranian Brig. Gen. Ebrahim Jabbari, an adviser to the Revolutionary Guard, vowed that ships passing through the strait would be set on fire.

As the day unfolded, some of the market fears softened after comments from President Donald Trump, AP reported. Trump said the U.S. Navy could begin escorting tankers through the strait, “if necessary,” to “ensure the FREE FLOW of ENERGY to the WORLD.” Even so, AP said investors remained uncertain about how long the war could last, keeping pressure on markets that are sensitive to the inflation outlook.

In stocks, AP said the sell-off started in Asia, with South Korea’s Kospi plunging 7.2% as markets reopened after a Monday holiday. AP reported Tokyo’s Nikkei 225 fell 3.1%, and France’s CAC 40 dropped 3.5% amid soaring natural gas prices in Europe tied to the conflict. On Wall Street, nearly three out of every four stocks within the S&P 500 declined, and influential Big Tech stocks did not prop up the broader indexes.

The Dow and other U.S. indexes showed the session’s intraday swings. AP reported the S&P 500 closed down 0.9%, after being down as much as 2.5% in the morning. The Dow declined 403 points, or 0.8%, after plunging more than 1,200 points earlier in the day, while the Nasdaq composite pared its loss to 1%. AP also reported that Nvidia fell 1.3% and that Target rose 6.7% after the retailer reported a better profit for the latest quarter than analysts expected.

Bond markets reflected the same anxiety about inflation. AP reported Treasury yields jumped early as investors worried about price pressures, with the 10-year Treasury briefly rising above 4.10% before pulling back just below 4.06%. AP said higher yields can make borrowing more expensive for U.S. households and businesses, affect mortgages and bond issuance, and put downward pressure on stock and other investment prices.

AP also reported the connection investors were drawing to rate-cut expectations and the Federal Reserve. Traders pushed back forecasts for when the Fed could resume cutting rates further into the summer, according to CME Group data, AP said. AP added that the market shift came even as Trump has been calling for Fed officials to cut rates now. Gold fell 3.5% to settle at $5,123.70 per ounce, AP reported, halting a run that had taken it above $5,300 as investors looked for safer places to park money.