NEW YORK (AP) — Oil prices plunged and U.S. stock futures jumped after President Donald Trump said he would hold off on his threat of devastating attacks on Iran for two weeks if the Iranians agree to allow ships to pass through the Strait of Hormuz.
Futures for U.S. crude oil sank 18% to around $92.60, while Brent crude oil futures fell about 6% to $103.40. Both prices remain well above where they were at the start of the war. Futures for the S&P 500 rose 2.4%. Trump said Iran has proposed a “workable” 10-point peace plan that could help end the war the U.S. and Israel launched on Feb. 28.
U.S. stocks swung sharply earlier on Tuesday due to uncertainty about the war with Iran.
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.
So far in the war, Trump has made a series of threats to blow up Iranian power plants if it doesn’t open the Strait of Hormuz, only to delay it several times.
A year ago, Trump ultimately backed off many of the stiff tariffs that he initially threatened to put on imports from other countries, though they ended up higher than from before his second term.
“Investors are likely to remain on edge and markets unable to establish trends, probably until there is a clear outcome later this evening: a deal, the U.S./Israeli strikes intensify, or Iran’s retaliation becomes escalatory instead of proportional,” according to Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.
Companies whose customers may have the least room to absorb the recent jump in gasoline prices also struggled. Dollar Tree slid 4.2%, and Dollar General fell 2.6%.
The average price for a gallon of regular gasoline across the United States has leaped to $4.14, according to AAA. It was below $3 a couple of days before the United States and Israel launched attacks to begin the war in late February.
Stocks of health insurers helped support the market after the Centers for Medicare & Medicaid Services said Medicare Advantage payments will likely see a net average increase of 2.48% in 2027. That was well ahead of what some investors expected, according to UBS analysts led by AJ Rice.
UnitedHealth Group jumped 9.4%, and Humana rose 7.9%.
Broadcom was another force pushing strongly upward on the market. It rose 6.2% after announcing deals with Google and Anthropic.
In stock markets abroad, Universal Music Group jumped 11.4% in Amsterdam after Bill Ackman’s Pershing Square Capital Management offered to buy the record label behind Taylor Swift and Bad Bunny in a cash-and-stock deal valued at approximately $64 billion.
In stock markets abroad, indexes fell across much of Europe. Asian stock indexes were stronger, with South Korea’s Kospi up 0.8% for one of the world’s bigger gains.
In the bond market, Treasury yields eased modestly. The yield on the 10-year Treasury fell to 4.30% from 4.34% late Monday.
That’s still well above its 3.97% level from before the war, and the rise has pushed up rates for mortgages and other loans going to U.S. households and businesses, which slows the economy.
Copyright 2026 The Associated Press. All rights reserved.