Stocks Drop Amid War Uncertainty

The US stock market wobbled to an uneven close as uncertainty continues about how long the war with Iran will last. The S&P 500 initially fell Tuesday to an early-morning loss of 0.8% and gave back much of its surge from Monday. It quickly erased that loss, and then yo-yoed throughout much of the day before ending lower.

• The S&P 500 fell 24.63 points, or 0.4%, to 6,556.37.
• The Dow Jones Industrial Average fell 84.41 points, or 0.2%, to 46,124.06.
• The Nasdaq composite fell 184.87 points, or 0.8%, to 21,761.89.

Smaller stocks bucked the downward trend and rose, the AP reports. Oil prices clawed back some of their sharp slides from the day before, while Treasury yields rose in the bond market.

Markets have been on a roller coaster since President Trump raised hopes that the war with Iran could end soon when he said Monday that the United States and Iran held productive talks "regarding a complete and total resolution of our hostilities in the Middle East." His announcement, which came just before Wall Street opened for trading, caused financial markets worldwide to flip immediately. It calmed worries that the war may cause a long-term disruption to the oil and natural gas industry in the Persian Gulf, one big enough to send a blast of inflation to the region's customers worldwide.

• But the market got both encouraging and discouraging signals about the war on Tuesday. On one side, attacks continued in the Middle East after Iran denied having direct talks with the United States. On the other, Pakistan's Prime Minister Shehbaz Sharif wrote on X that his country is ready to "facilitate meaningful and conclusive talks" to end the Iran war.
• After all that, the price for a barrel of Brent crude oil rose 4.6% to settle at $104.49 per barrel, a day after slumping more than 10%. Benchmark US crude rose 4.8% to $92.35 per barrel and clawed back some of its own 10.3% plunge from the day before.

In the bond market, Treasury yields returned to rising and upped the pressure on financial markets worldwide. Higher yields make mortgages and other kinds of borrowing more expensive for households and for businesses, which slows the economy. They also hurt prices for all kinds of investments, from stocks to gold to cryptocurrencies. Gold's price sank again and settled at $4,402.00 per ounce, down roughly $1,000 from a high point earlier this month. Its price has dropped despite its reputation as a safe harbor for investors during scary times.

On Wall Street, Estee Lauder dropped 9.9% to one of the market's sharpest losses after confirming that it's in merger talks with Spanish cosmetics company Puig. The potential deal could put such brands as MAC, Clinique, Charlotte Tilbury, and Apivita together under one company. Estee Lauder said no final decision has been made yet. On the winning side of Wall Street was Smithfield Foods. Its stock rose 4.3% after the meat company reported stronger profit and revenue for the latest quarter than analysts expected. Stocks of oil-related companies also helped to lift the market after crude prices rebounded. Exxon Mobil rallied 2.6%.