US stocks: US market ends down as Iran peace deal optimism fades

On Tuesday, the US market closed lower as optimism surrounding a potential Iran peace deal waned. Investors became increasingly skeptical about the prospects of stability in the Middle East. The Strait of Hormuz remained closed due to the ongoing conflict. Brent crude futures hovered near a one-week high amid choppy trading conditions.

The S&P 500 energy sector index managed to climb, but overall, it proved difficult to reach a mutually beneficial agreement. Analysts noted that oil prices were rising due to heightened uncertainty surrounding the situation. While the market has been affected by the conflict intermittently, it has not been the major headwind many initially anticipated.

Major tech companies like Amazon and Alphabet experienced declines, contributing to the overall downturn in the S&P 500 and Nasdaq. SpaceX also saw a slight drop. Alternative asset managers, such as Apollo Global and Blackstone, gained as they partnered with Nvidia to develop compute-financing platforms, with the aim of mobilizing more than $500 billion.

The S&P 500 closed 0.33% lower at 7,727.79 points, while the Nasdaq Composite fell 0.60% to 26,445.00. The Dow Jones Industrial Average experienced a 0.35% decrease, ending at 53,787.57. Strong quarterly earnings had propelled the S&P 500 to record highs the previous week, although the Nasdaq was down about 2% from its previous all-time high on June 2.

Inflation data, including consumer and producer price readings, will play a significant role in determining market expectations regarding the Federal Reserve's monetary policy direction. Chair Kevin Warsh's objective of reducing guidance on monetary policy will be closely watched. Traders remain uncertain about the likelihood of an interest rate hike during the Federal Open Market Committee's September meeting, as indicated by the CME FedWatch tool.

Rising energy costs, primarily driven by the Iran conflict, have fueled inflation concerns and complicated the approaches of central banks worldwide. Jabil, an electronics firm, saw an increase following UBS upgrading its stock from neutral to buy. However, athleisure brand On disappointed investors by missing sales estimates. LNG company Venture Global reported a second-quarter revenue that slightly fell short of expectations.