U.S. stocks close mixed Tuesday as oil climbs above $98 amid unresolved Iran war tensions

Despite an early sell-off, major U.S. stock indices closed mixed on Tuesday, as caution prevailed among investors regarding the uncertain nature of the escalating conflict in Iran.

The Dow Jones Industrial Average gained 0.30% to 46,348.22, thanks to strength across the energy and financial sectors. The S&P index increased by 0.09% to 6,586.74, while the Nasdaq composite fell by 0.32% to 21,877.14 due to weakness in technology shares.

Oil prices continued to rise; U.S. crude closed at $91.33 a barrel (+3.63%), while Brent crude was at $98.54. Shipments through the Strait of Hormuz were still constrained to less than 5% of capacity, keeping near-term contracts in backwardation.

Monday’s stock-market rally was sparked by President Trump's comments, indicating he will hold off on bombarding Iranian power-generating facilities because he has had “constructive” discussions with officials in Tehran. Iranian officials denied holding any negotiations with the U.S. and instead promised to continue their operations through the critical shipping route in the Strait of Hormuz.

Treasury yields increased slightly, with the yield on the 10-year Treasury note climbing to 4.37%. The dollar gained strength and remains above $111, putting pressure on emerging-market currencies as the inflation expectations have undergone re-pricing.

According to surveys conducted during March, business activity throughout the euro area has almost come to a halt due to record-high prices of raw materials and longer lead times for deliveries associated with energy-related disruptions. The inflation measures for the entire euro-zone exceeded the acceptable levels as determined by the European central bank.

Communication services and technology led S&P 500 decliners. Airlines stabilized after prior routs while oil producers captured outperformance from sustained war premia.

Global MSCI world index climbed 0.45 percent to 989.37. Pan-European STOXX 600 rose 0.54 percent, buoyed by energy names offsetting industrial weakness.

Federal Reserve Governor Christopher Waller cited oil risks in holding rates steady last week. Markets shifted toward potential hikes if energy pass-through persists.

Purchasing manager indexes confirmed global slowdowns at 11-month lows. Middle East uncertainty overshadowed corporate earnings and AI momentum.

Traders positioned defensively entering quarter-end. Oil's dominance left equities vulnerable absent diplomatic breakthroughs.