The S&P 500 slipped 0.2% on Tuesday, while the Dow and Nasdaq finished little changed, as investors weighed optimism about de-escalation against reports of intensified military strikes. Major indices briefly recovered on hopes for a swift resolution to the Middle East conflict, but trading turned choppy after the White House clarified that no naval escort operations had yet begun in the Strait of Hormuz.
The initial lift from easing oil prices was partly offset by a renewed move into cash, as market participants assessed indications that Iran may be deploying mines in the area. Technology stocks offered some support, with Micron rising 3.5% and Intel gaining 2.6% on the back of strong sales figures from TSMC. In contrast, defense contractors came under pressure, with Lockheed Martin falling 1.9% amid shifting diplomatic signals.
Overall, the bout of volatility left the major benchmarks modestly lower as investors look ahead to key inflation data later this week.
