Oil prices jumped on Tuesday, climbing back above $110 per barrel, amid a lack of progress in reopening the key Strait of Hormuz.
Meanwhile, tech stocks took a hit, and investors turned their attention to corporate earnings and the outlook for interest rates.
Efforts to end the Middle East war appeared at a standstill on Tuesday, with the United States considering Tehran’s latest offer to unblock the strait, and Iran saying Washington could no longer dictate terms.
Iran has blockaded the waterway — a vital conduit for oil and gas shipments — since the start of the US-Israeli offensive two months ago, sending shockwaves through the global economy.
CNN, however, reported that US President Donald Trump was unlikely to accept Iran’s proposal to restore traffic in the strait, as Qatar warned of the possibility of a “frozen conflict” if a definitive resolution is not found.
Oil prices rallied, with Brent crude for June delivery rising 2.7 percent to $111.19 a barrel.
The benchmark US contract, WTI for June delivery, rose 3.4 percent to $99.68 per barrel.
Hopes for a deal had been rising going into last weekend but Trump dashed them on Saturday by scrapping a planned trip by his envoys Steve Witkoff and Jared Kushner to Islamabad.
“Right now, the market is not optimistic about the chance of a deal to reopen the Strait due to Iran’s request to push discussions about nuclear disarmament into the future,” said Kathleen Brooks, research director at XTB trading platform.