Investor sentiment weakened as Iran denied negotiations and renewed strikes with Israel, keeping oil elevated and equities under pressure.
U.S. stocks opened lower while oil prices held above $100 a barrel on March 24, as lingering doubts over easing Middle East tensions weighed on sentiment, tempering a relief rally from the previous session despite President Donald Trump’s delaying strikes on Iran’s power grid and energy infrastructure, citing progress in peace talks.
At the open, Wall Street’s main indexes gave back some of the prior session’s gains that followed Trump’s decision to extend by five days his weekend ultimatum for Iran to reopen the Strait of Hormuz within 48 hours, after he pointed to “productive” discussions with Tehran.
Iranian officials have denied that any negotiations are underway, although Iran’s foreign minister has held talks with regional counterparts.
Iran and Israel traded strikes on March 24, keeping investors on edge. Oil was trading around $102.7 a barrel after falling by as much as 15 percent in the previous session.
Stock futures pointed to a weaker open, and early trading confirmed the subdued tone. The Dow Jones Industrial Average fell 108.6 points, or 0.24 percent, at the open, the S&P 500 lost 28.9 points, or 0.44 percent, and the Nasdaq Composite dropped 139.2 points, or 0.63 percent.
The conflict has pushed oil prices higher, stoking inflation concerns and complicating the outlook for interest rates. The U.S. Federal Reserve struck a hawkish tone last week, projecting only one rate cut in 2026.
Investors initially took comfort from Trump’s peace talk comments, sending Wall Street’s main indexes up more than 1 percent on Monday in their biggest one-day gain since Feb. 6. However, momentum faded as uncertainty over the conflict persisted.
“Iranian officials have repeatedly denied that talks with the U.S. were even happening, which contributed to markets reversing some of the initial risk-on reaction late yesterday and overnight,” Deutsche Bank analysts led by Jim Reid said.
“Much now depends on the progress of any talks, and whether the more optimistic rhetoric is followed up by concrete action.”
By Tom Ozimek
