Wall Street opened in the green on Tuesday as investors welcomed signs of potential progress toward easing tensions in the Middle East while turning their attention to a crucial week of US inflation data that could shape expectations for Federal Reserve policy.
The Dow Jones Industrial Average rose about 101 points, while the S&P 500 gained 0.05%. The Nasdaq Composite was almost unchanged at the open.
Investor sentiment improved after reports suggested the United States and Iran could be moving closer to an arrangement to end months of conflict, even as uncertainty over the reopening of the Strait of Hormuz continued to influence energy markets.
Middle East developments ease market concerns
Markets responded positively after Pakistan’s Defence Minister Khawaja Asif told Bloomberg News that recent signals pointed to a peace agreement between the United States and Iran.
The comments came after Qatar’s foreign ministry said talks between Iran and Oman had reached an advanced stage.
The developments followed a volatile start to the week, when oil prices surged about 5% amid uncertainty over negotiations to reopen the Strait of Hormuz, one of the world’s most important oil shipping routes.
On Tuesday, however, oil prices edged lower as investors assessed the possibility of progress.
US West Texas Intermediate crude traded around $82 per barrel, while Brent crude hovered near $87 per barrel.
Despite the improvement in sentiment, negotiations remain complicated.
Iran has maintained that the United States must meet several conditions before the strategic waterway can reopen, while Tehran has also ruled out restarting direct negotiations unless previous commitments are honored.
Inflation data takes center stage
Beyond geopolitical developments, investors are preparing for a key batch of US economic data that could influence the Federal Reserve’s next policy decision.
The July consumer price index is scheduled for release on Wednesday, followed by producer price inflation data on Thursday.
The reports come after last week’s weaker-than-expected employment data complicated the central bank’s outlook by raising concerns about slowing economic growth while higher energy prices continue to fuel inflation risks.
Markets remain divided on the Fed’s next move, with traders almost evenly split over whether policymakers will raise interest rates in September or leave them unchanged, according to the CME FedWatch Tool.
Wall Street enters the week after a mixed session on Monday, when the major indexes closed slightly lower as investors weighed Middle East developments.
Despite the pullback, the S&P 500 and Dow remain close to record highs, while the Nasdaq is about 2% below its all-time high after recovering from its July decline.
Corporate movers highlight active trading
Several individual stocks were active on Tuesday.
Riot Platforms jumped nearly 11% in trading following a report that the company secured a $9 billion cloud computing agreement with Anthropic.
Intel slipped modestly after extending Monday’s losses, following the pricing of a $20 billion stock offering aimed at supporting its growth strategy.
Rocket Lab declined after appearing to delay the first launch of its Neutron rocket, while Swiss sportswear company On fell more than 21% after reporting quarterly sales below Wall Street expectations.
Hims & Hers Health also moved lower after posting a wider-than-expected second-quarter loss, and Venture Global slipped after second-quarter revenue came in slightly below analyst estimates.
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