Oil prices rise and stocks fall as war with Iran still advances despite Trump’s talk of negotiations

U.S. markets ticked slightly lower and oil prices rose early Tuesday as the war in the Middle East continued a day after U.S. President Donald Trump said the United States had made progress in talks with the Islamic Republic to end the conflict.

Oil prices got back to rising early Tuesday, and U.S. stocks are returning some of their gains. The price for a barrel of Brent crude rose 3.5 per cent to US$103.47 per barrel, a day after slumping more than 10 per cent. The S&P 500 fell 0.6 per cent, giving back almost half of its gain from the day before. The Dow Jones Industrial Average fell 363 points, or 0.8 per cent, and the Nasdaq composite fell 0.5 per cent.

With thousands more U.S. Marines on their way to the Gulf, both sides firing intense barrages and Iran denying any negotiations are taking place, the war’s tempo remained high a day after Trump delayed his self-imposed deadline for Iran to reopen the Strait of Hormuz. Tehran’s chokehold on that crucial waterway has snarled international shipping, sent fuel prices skyrocketing, and threatened the world economy.

On Monday, markets rebounded and oil prices fell 10 per cent after Trump posted on social media that the U.S. and Iran held productive talks “regarding a complete and total resolution of our hostilities in the Middle East” over the last two days.

Iran denied such talks took place and Iranian parliament speaker Mohammad Bagher Qalibaf said that “fakenews is used to manipulate the financial and oil markets” in a post on X.

“Still, while there’s clearly a long way to go until some sort of ceasefire is agreed, and peace restored, we do at least seem to have taken the first step towards those ends.” said Michael Brown, senior research strategist at Pepperstone.