Wall Street’s main indexes recovered on Tuesday, as easing oil prices provided relief to equity markets despite renewed tensions in the Middle East that continue to cloud the global outlook.
Dow Jones Industrial Average rose 198 points, or 0.41%, while the S&P 500 gained 0.63% and the Nasdaq Composite climbed 0.87%.
The rebound followed a volatile start to the week, when escalating geopolitical risks weighed on investor sentiment and pushed stocks lower.
The latest moves highlight the competing forces currently shaping markets, with geopolitical uncertainty on one side and resilient earnings and economic data on the other.
Oil prices retreat, offering relief to equities
A key driver behind Tuesday’s rebound was a pullback in crude oil prices.
Brent crude futures fell more than 2%, though they remained above $110 per barrel, while US West Texas Intermediate crude declined around 2% to trade just above $103.
The drop in oil prices helped ease immediate concerns about inflationary pressure and energy-driven economic disruption, providing a boost to stock futures.
However, the broader geopolitical backdrop remains fragile.
Despite the fragile ceasefire, US officials signaled some progress in maintaining shipping activity.
Defense Secretary Pete Hegseth said that “two US commercial ships, along with American destroyers, have already safely transited the strait, showing the lane is clear.”
This follows earlier comments from President Donald Trump that the US would help “guide” stranded vessels through the region.
Geopolitical risks clash with strong earnings backdrop
Investor sentiment remains divided as markets weigh geopolitical risks against a backdrop of solid corporate earnings.
While some participants warn that worst-case scenarios may not yet be fully priced in, others argue that fundamentals continue to support equity valuations.
Recent earnings releases have provided some support to markets.
PayPal fell more than 10% after issuing a disappointing outlook for the second quarter despite earnings meeting expectations.
DuPont gained 5.7% after lifting its annual profit forecast.
Among technology and growth names, Pinterest (NYSE: PINS) surged 10% after forecasting second-quarter revenue above analyst estimates.
Intel shares also advanced 8.3% following a report that Apple had held exploratory discussions about using Intel and Samsung Electronics to manufacture processors.
At the same time, not all earnings reactions were positive.
Palantir Technologies slipped about 2.49% despite reporting results that beat expectations and raising its full-year guidance, underscoring the selective nature of investor response.
Economic data and policy signals in focus
Beyond earnings and geopolitics, investors are also monitoring economic indicators and policy developments for further direction.
The US Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report, due later in the day, is expected to provide fresh insight into labor market conditions.
Additional data released Tuesday showed that the US trade deficit widened modestly in March on a monthly basis to $60.3 billion, though it declined sharply compared to a year earlier.
The annual deficit fell by $211.2 billion, reflecting a 12% rise in exports and a 9.1% drop in imports.
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