Stocks Pare Drop on Hormuz Hopes as War Drags On: Markets Wrap
(Bloomberg) — Wall Street traders grappling with a range of possible outcomes for the war in Iran drove stocks away from session lows amid hopes for talks to end a conflict that kept dragging on. Oil rose. Bonds fell.
The S&P 500 pared a drop that earlier approached 1%. President Donald Trump signaled that Iran had offered a “present” as a show of good faith in negotiations, noting it was related to Strait of Hormuz flows. The US and regional mediators are discussing the possibility of holding high-level peace talks as soon as Thursday, but await a response from Tehran, Axios reported.
As the 25-day conflict that’s upended markets raged on, Trump said Secretary of State Marco Rubio and Vice President JD Vance alongside special envoys are involved in negotiations. Still, the US is planning to deploy about 3,000 troops from the 82nd Airborne Division to the Middle East, the Wall Street Journal reported.
Iran has started charging transit fees on some commercial vessels passing the Strait of Hormuz, people familiar with the matter have said, the latest sign of its control over the most-important maritime energy route. Yet Tehran said non-hostile foreign ships are allowed to cross the waterway on its terms.
“It all comes down to the re-opening of the Strait of Hormuz,” said Matt Maley at Miller Tabak. “So, if we hear that ‘good progress is being made’ in the negotiations at the end of this week, it won’t be enough, if the Strait remains very restricted.”
Aside from the geopolitical risks, Maley also noted that the issues facing the private-credit market are not receding, so brushing these problems aside “is not a good idea.”
Two of the biggest names in private credit, Ares Management Corp. and Apollo Global Management Inc., blocked investors from getting even half of the money they wanted out of their funds, a sign of mounting strain in the $1.8 trillion market.
Any optimism about the war in the Middle East ending without the US first making an attempt to secure and control the Strait of Hormuz, or without getting first more leverage in talks with Iran, still seems misplaced, according to Thierry Wizman at Macquarie Group.
“The longer oil prices stay high, the longer central banks will feel obligated to sound as if they will tighten policy,” he said.
Yet Wizman noted that hawkish policies that come in response to supply-side induced inflation have been proven to be the cause of much more financial stress than when monetary policy comes in response to an inflation that is demand-driven.
In the wake of the war, growth in US business activity slowed in March to an almost one-year low and prices paid for materials and other inputs picked up.
“If this proves to be a short-term disruption, as markets are currently pricing, then the baseline outlook still assumes moderate global growth,” said Tiffany Wilding and Andrew Balls at Pacific Investment Management Co. “However, a prolonged disruption would pose more significant challenges and increase global recession risks.”
Barclays Plc’s Venu Krishna raised his year-end S&P 500 target to 7,650 despite growing macroeconomic risks from the war, AI disruption and private-credit stress.
“The macro backdrop has become more fragile,” he wrote. “But we believe the US continues to offer stronger nominal growth than other major economies and a secular growth engine in technology that shows few signs of stopping.”
The US equity benchmark closed at 6,556.37 Tuesday.
Corporate Highlights:
United Airlines Holdings Inc. Chief Executive Officer Scott Kirby said ticket prices may have to go up by 20% if jet fuel prices remain elevated for longer. Amazon Web Services is developing an AI agent to automate some of functions for sales, business development and other groups that have been targeted in the tech giant’s sweeping job cuts, the Information reported. Arm Holdings Plc, which made its name licensing technology to semiconductor makers, will begin selling its own chips for the first time, adding a business that it expects to generate about $15 billion annually within five years. OpenAI is nearing a deal to raise about $10 billion from venture investors, according to people familiar with the matter, bringing the total haul from its latest funding round to roughly $120 billion. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 4 p.m. New York time The Nasdaq 100 fell 0.8% The Dow Jones Industrial Average fell 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.2% to $1.1584 The British pound fell 0.4% to $1.3381 The Japanese yen fell 0.4% to 159.02 per dollar Cryptocurrencies
Bitcoin fell 2.3% to $69,276.63 Ether fell 2.1% to $2,115.14 Bonds
The yield on 10-year Treasuries advanced five basis points to 4.40% Germany’s 10-year yield advanced two basis points to 3.03% Britain’s 10-year yield advanced four basis points to 4.96% Commodities
West Texas Intermediate crude rose 4.3% to $91.91 a barrel Spot gold fell 0.1% to $4,401.07 an ounce ©2026 Bloomberg L.P.
