U.S. stock futures traded lower early Tuesday, signaling a softer start for Wall Street after the major indexes ended Monday’s uneven session with modest gains.
Investor sentiment weakened as oil prices extended their recent rally, heightening concerns that renewed instability in the Middle East could pressure both economic growth and inflation.
U.S. crude futures climbed more than 3% on Tuesday following a 2.8% surge in the previous session.
The continued rise in energy prices comes as negotiations between the United States and Iran remain deadlocked, with both sides struggling to finalize an agreement aimed at ending the conflict and reopening the Strait of Hormuz, one of the world’s most important oil shipping routes.
President Donald Trump told reporters Monday evening that the ceasefire between Washington and Tehran was on “life support,” describing the truce as “unbelievably weak.”
Inflation Report Helps Ease Some Concerns
Futures recovered part of their earlier declines after new U.S. inflation figures came in broadly in line with expectations.
Data released by the Labor Department showed consumer prices rose at a slower pace in April.
Monthly inflation eased to 0.6% from 0.9% in March, helping calm fears that rising oil prices could trigger a sharper acceleration in consumer costs.
Markets appeared relieved that the inflation data did not exceed analyst forecasts.
Wall Street Closes Slightly Higher Despite Choppy Trading
Stocks struggled to maintain direction throughout Monday’s session following the strong rally seen last week.
Major indexes repeatedly swung between gains and losses before ending the day modestly higher.
The Dow Jones Industrial Average rose 95.31 points, or 0.2%, to finish at 49,704.47. The Nasdaq Composite added 27.05 points, or 0.1%, closing at 26,274.13, while the S&P 500 gained 13.91 points, or 0.2%, to end at 7,412.84.
Despite the muted performance, both the Nasdaq and S&P 500 posted fresh record closing highs.
Middle East Developments Continue to Dominate Market Focus
The cautious tone across markets reflected lingering uncertainty over the near-term outlook following recent gains.
Although investor sentiment remains generally optimistic, traders continue to closely follow developments surrounding the Middle East conflict.
Oil prices remained central to market attention after crude futures rose more than 2% on Monday.
The latest rally accelerated after Trump rejected Iran’s response to a U.S. peace proposal, describing it as “totally unacceptable” in a Truth Social post.
Iranian state media reported that Tehran’s counterproposal included demands for compensation over war-related damage and recognition of the country’s sovereignty over the Strait of Hormuz.
Even so, stronger-than-expected corporate earnings have recently helped support U.S. equities despite ongoing geopolitical uncertainty.
Energy, Gold and Chip Stocks Lead Gains
Gold mining shares advanced sharply as gold prices moved moderately higher.
The NYSE Arca Gold Bugs Index climbed 3.7% during Monday’s session.
Oil-related stocks also gained ground alongside crude prices, with the Philadelphia Oil Service Index advancing 2.6%.
Semiconductor, networking and oil services companies also posted solid gains.
Airline and Consumer Stocks Under Pressure
Airline shares fell sharply as rising oil prices increased concerns over higher fuel expenses.
The NYSE Arca Airline Index dropped 3.1%.
Retail, housing and banking shares also moved lower, offsetting some of the strength seen in commodity-linked and technology sectors.
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