US stocks swung sharply on Tuesday ahead of a pause in hostilities between the US and Iran announced after markets had closed.
US President Donald Trump announced the two-week pause on attacks against Iran on social media, with Iranian officials separately saying that the passage of shipping through the Strait of Hormuz would be allowed during the period, but under Iranian management.
The pause came just hours ahead of a looming deadline set by President Trump, after which he had threatened to destroy Iranian power plants and bridges if conditions set by the US had not been met.
The S&P 500 had earlier fallen as much as 1.2% after Trump threatened that a "whole civilization will die tonight, never to be brought back again" if Iran did not meet his deadline. But stocks rallied at the end of trading after Pakistan's prime minister Shehbaz Sharif urged Trump to extend his deadline for another two weeks and asked Iran to open up the strait.
The S&P 500 erased all its losses and ended with a modest gain of 0.1%. The Dow Jones Industrial Average dipped 85 points, or 0.2%, and the Nasdaq composite added 0.1%.
They're the latest swings to hit financial markets since late February because of deep uncertainty about when the fighting may end. During just the first hour of Tuesday's trading, the Dow careened between a gain of 74 points and a loss of 425.
All told, the S&P 500 rose 5.02 points to 6,616.85 on Tuesday. The Dow Jones Industrial Average dipped 85.42 points to 46,584.46, and the Nasdaq composite added 21.51 to 22,017.85.
Oil prices shaky
Oil prices were likewise shaky. The price for a barrel of benchmark U.S. crude to be delivered in May briefly climbed above $US117 before settling at $US112.95, up 0.5%.
The price for a barrel of Brent crude, the international standard, eased by 0.5% to $US109.27. It's still well above its roughly $US70 level from before the war began in late February.
Oil prices have spiked because the war has snarled the production and transportation of crude in the Persian Gulf. Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran has blocked it to enemies.
The worry in markets has been that a long-term disruption will keep oil prices high for a long time and send a painful wave of inflation crashing through the global economy.
On Wall Street, companies with big fuel bills fell sharply as high oil prices cranked up the pressure. Companies whose customers may have the least room to absorb the recent jump in gasoline prices also struggled.
The average price for a gallon of regular gasoline across the United States has leaped to $US4.14, according to AAA. It was below $US3 a couple days before the United States and Israel launched attacks to begin the war in late February.
