Deal Hopes Fade, Dow Under Pressure
US stocks weakened on Tuesday (April 7) ahead of President Donald Trump's 8:00 PM ET deadline for Iran to reopen the Strait of Hormuz, as hopes for a deal faded. The Dow fell 0.6%, the S&P 500 fell 0.4%, and the Nasdaq fell 0.4%.
Trump said the US would destroy Iranian power plants and bridges if a deal wasn't reached, but signaled that military action might not occur even if the deadline passed. Tensions escalated after reports from The Wall Street Journal and NBC News, citing US officials, that the US carried out an attack on Kharg Island overnight. The Wall Street Journal also reported that negotiators were not optimistic that a deal could be reached before the deadline.
These developments pressured equities while boosting energy: WTI rose more than 2% above US$115/barrel, while Brent rose 0.5% above US$110/barrel, confirming the market's renewed supply risk premium ahead of a final decision on Hormuz.
Source: Newsmaker.id