Wall Street closed at all-time highs Tuesday. The S&P 500 added $1.2 trillion in market cap. Crude dropped nearly 5% on news that talks to reopen the Strait of Hormuz are accelerating, with Treasury Secretary Scott Bessent telling CNBC a deal could materialize within 24 hours.
The Dow climbed 1.71% to 54,085.88. The S&P 500 advanced 1.79% to 7,736.52, marking its first record close since early July. Nasdaq outpaced both, jumping 2.59% to 26,584.99 as the geopolitical pressure that had weighed on markets for months finally began to lift.
Diplomacy moves fast
Secretary of State Marco Rubio confirmed the strait remains open, with ships and oil flowing through. Iran, Oman, and the U.S. are in active negotiations aimed at increasing vessel traffic and improving safety. President Trump suspended military action to allow talks to continue, signaling serious intent from Washington.
Energy markets reacted instantly. Crude's 5% plunge pulled Treasury yields lower and supported equities across the board. The Strait of Hormuz handles a massive chunk of global seaborne oil and liquefied natural gas shipments, so any shift in its status ripples through every corner of the market. Since February, the waterway's uncertain status had capped risk appetite and kept inflation fears alive.
Intraday swings were sharp. Both indexes traded even higher during the session before closing, showing how quickly sentiment can swing on Middle East headlines. Bessent's comments provided the final catalyst that pushed traders fully into risk-on mode.
This is informational content only and not financial advice. Market movements depend on numerous factors beyond geopolitical developments.
