Stocks mostly dipped lower at the end of a volatile session on Tuesday as investors continue to monitor the latest headlines surrounding the United States-Israeli war with Iran.
The Dow Jones Industrial Average
Crude oil futures fell on Tuesday after jumping above $100 per barrel on Monday as market participants were encouraged on news that multiple countries were meeting to discuss releasing emergency oil reserves to support supply disruptions caused by the conflict. The West Texas Intermediate traded about 12% lower to settle at $83 a barrel, while international benchmark Brent crude futures declined 11% to about $88 per barrel on Tuesday.
Boosting those outlooks, the International Energy Agency announced it would meet on Tuesday to discuss the possible release of oil reserves by member countries -- which include G7 members Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Member countries currently hold over 1.2 billion barrels of public emergency oil and a further 600 million barrels held under government obligation, according to the IEA.
IEA Executive Director Faith Birol said in a statement that the more than 30 member countries will "assess the current security of supply and market conditions to inform a subsequent decision on whether to make emergency stocks of IEA countries available to the market."
Wall Street is coming off of another wildly volatile session on Monday, with the Dow reversing a more than 800 point loss, as risk sentiment improved after President Donald Trump signaled that the war may be nearing its end. However, CBS News reported on Tuesday that Iran may be deploying mines in the Strait of Hormuz, which could further complicate the energy sector and escalate the conflict.
"If for any reason mines were placed, and they were not removed forthwith, the Military consequences to Iran will be at a level never seen before," Trump wrote in a Truth Social post on Tuesday, adding that "If, on the other hand, they remove what may have been placed, it will be a giant step in the right direction!"
The ongoing conflict has impacted fuel-reliant industries the most, especially airlines, who are expected to see near-term profit hits from the increase in energy prices. However, Bernstein analyst David Verno wrote in a Tuesday note that investors should buy major airline stocks such as American Airlines
"It is impossible to know how long the current oil crisis will last or know with certainty how the shock will ultimately impact the broader economy," Verno wrote. "We do think, however, that under a reasonable set of conservatively reasonable assumptions, the expected impact to longer term earnings power will be much less severe than the recent move in the stocks."
Looking ahead, market participants will be met with fresh reports on consumer inflation on Wednesday as they continue to closely watch developments from the Middle East. Key earnings reports for Wednesday include Oracle
