On Tuesday, U.S. stocks dipped while oil prices climbed as the clock ticked down to President Trump’s 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz. Many investors seemed to believe a deal wouldn’t materialize in time.
By around 2:20 p.m. ET, the Dow Jones Industrial Average had dropped 175 points, which is about 0.4%. The S&P 500 and Nasdaq also showed declines of 0.3% and 0.5%, respectively.
Brent crude oil prices hovered around $109.64 per barrel, while West Texas Intermediate crude saw a 1.3% increase to reach $113.79. National gasoline prices were also on the rise, hitting $4.14 per gallon, according to AAA.
President Trump reiterated the pressing deadline for Iran to strike a deal to reopen this crucial route, which accounts for 20% of global oil transport, or face extensive damage to the country’s bridges and power plants.
In a post on social media earlier that day, the President indicated that a timely agreement with Iran seemed unlikely to prevent military action.
“Tonight, an entire civilization will perish and never rise again. I don’t want it to happen, but it probably will,” he stated on Truth Social.
He also suggested, somewhat ambiguously, that perhaps with a “complete and total regime change” in Iran, something revolutionary might emerge—who knows?
Tensions rose significantly following reports that the U.S. carried out an attack on Kharg Island, a vital Iranian energy hub. Although the island is only about one-third the size of Manhattan, it handles 90% of Iran’s oil exports.
This location is crucial to Iran’s economy, and officials have previously warned that any assault on it would represent a major red line.
When asked about the reported strikes earlier that day, President Trump opted not to comment.
Him mentioning the impending deadline for Iran—threatening to target power plants and bridges—added to the rhetoric. He called the day “Power Plant Day and Bridges Day rolled into one.”
There has been criticism that targeting these infrastructures could be classified as war crimes. When questioned about this on Monday, Trump remarked, “No, absolutely not. I hope we don’t have to do that.”
Since the U.S. and Israel initiated strikes against Iran on February 28, there have been attacks on key energy infrastructures across the Middle East, impacting facilities in Iran, Qatar, and Saudi Arabia.
Analysts warn that even if the conflict is resolved quickly, ongoing attacks could keep oil prices elevated due to the complexities and costs involved in repairs.
Economists also express concerns that shocks to energy supply often translate to higher consumer prices, potentially reigniting inflation and maintaining high interest rates.
