U.S. stocks maintained their upward momentum during Tuesday's early session, with the Dow Jones Industrial Average climbing 200 points. Traders were closely monitoring a series of strong corporate earnings reports. Meanwhile, crude oil prices declined across the board. The commander of U.S. Central Command confirmed direct military engagement between U.S. and Iranian forces.
The Dow Jones Industrial Average increased by 210.86 points, or 0.43%, to 49,152.76. The Nasdaq Composite rose 225.69 points, or 0.90%, to 25,293.50. The S&P 500 gained 49.94 points, or 0.69%, reaching 7,250.69.
A broad decline in crude oil prices provided support for equity indices. West Texas Intermediate futures fell 2% but remained above $103 per barrel. Brent crude futures dropped 1% yet held above $112 per barrel.
The ceasefire between the U.S. and Iran remained fragile following new attacks on vessels in the Strait of Hormuz. However, U.S. Secretary of Defense Pete Hegseth stated on Tuesday that "two U.S. commercial ships, along with a U.S. destroyer, have safely transited the strait, demonstrating that the passageway remains open."
Earlier, U.S. President Donald Trump indicated earlier in the week that the U.S. would "guide" trapped vessels through the strait.
Another batch of better-than-expected quarterly earnings also contributed to the market's advance. Notably, Pfizer reported first-quarter profit and revenue that exceeded expectations. The company also reaffirmed its full-year performance outlook. Shares of Belgian brewer Anheuser-Busch, listed in the U.S., rose 6% after reporting optimistic quarterly results.
An exception was Palantir Technologies, whose shares fell 2% despite the company posting first-quarter results that beat analyst forecasts—revenue grew at the fastest pace since its 2020 IPO. The company also raised its full-year guidance.
Stocks had declined on Monday after the United Arab Emirates stated that Iran had launched drone and missile attacks against it, further destabilizing the already fragile U.S.-Iran ceasefire.
Reports indicated that the U.S. had sunk Iranian vessels in the Strait of Hormuz. According to the reports, General Brad Cooper, commander of U.S. Central Command, confirmed during a press conference on Monday afternoon that U.S. Army AH-64 Apache helicopters and U.S. Navy MH-60 Seahawk helicopters conducted a joint operation in the strait, sinking six small Iranian attack boats that threatened commercial shipping. This marks the first publicly confirmed direct engagement since President Trump announced "Project Freedom" on May 3—a plan for U.S. forces to escort commercial ships through the Strait of Hormuz by force.
However, Iranian state media denied claims that the boats were sunk.
News of direct U.S.-Iran clashes had pushed oil prices higher on Monday, thereby pressuring equity markets.
Despite escalating Middle East tensions and Monday's market decline, Adam Crisafulli of Vital Knowledge expressed reasons for optimism.
He noted, "We continue to believe that Trump remains eager to avoid military escalation and is seeking to steer the situation toward a negotiated agreement."
On the economic data front, the U.S. trade deficit widened on a monthly basis in March but was down 55% compared with the same period a year before the implementation of Trump's import tariffs.
The U.S. Department of Commerce reported on Tuesday that the total goods and services trade deficit for the month was $60.3 billion, an increase of $2.5 billion from February but slightly below the Dow Jones estimate of $60.9 billion. Annually, the trade deficit decreased by $211.2 billion compared to the prior year. Exports grew by 12%, while imports fell by 9.1%. This represents the final monthly data before the implementation of Trump's "Tax Liberation Day" policies in April 2025.
Comments