Wall Street indexes fell in a volatile session on Tuesday as investors were torn between fears of a rise in oil prices and hopes for a resolution to the US-Israeli war over Iran after US President Trump claimed there had been talks, as reports suggested more US troops were moving to the Middle East.

The Dow Jones Industrial Average fell 84.75 points (0.18%) to 46,123.72, while the S&P 500 lost 21.42 points (0.33%) to 6,559.62 and the Nasdaq Composite shed 184.87% (184.87%) to 46,123.72.

US Treasuries extended profits after weak auction of 2-year Treasury notes, also adding pressure on equity markets.

The indicators gained some support after Trump told reporters that the United States was talking to the “right people” in Iran to reach an agreement to end hostilities and that Iran agreed it would never have nuclear weapons. But reports that the Pentagon would send thousands more troops from the elite 82nd Airborne Division to the Middle East raised some concerns.

Wall Street indexes on Monday marked their biggest one-day gain since Feb. 6) as oil prices eased after Trump suspended strikes against Iranian power plants and announced talks with Iran, even as Tehran rejected talks with the U.S. But energy prices rose on Tuesday as crude oil futures settled more than 4%.

“Stocks are trying to find their footing as investors keep one eye on social media and another eye on every headline. We’re very short-term oriented,” said Carol Schleif, chief market strategist at BMO Private Wealth.

“Markets are trying to hold on to the optimism they had yesterday. They’re so ready to move on from the war talk, even if it’s not 100% settled,” but she added, “There’s a lot of panic. People are looking at oil and looking at interest rates and worrying about whether we could have a long-term negative impact on both energy and interest rates.”

Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research in New York, also described the “double whammy” of higher oil prices and higher rates as a “stagflationary backdrop, which, needless to say, is not a positive backdrop for the stock market.”

Among the 11 S&P 500 major industry sectors, energy edged gains during the session while communications services and technology led the losers.

Meanwhile, private credit concerns resurfaced after Ares Management reportedly capped redemptions at 5% in its private credit fund with Apollo Global Management amid a surge in withdrawal requests.

An earlier survey showed US business activity fell to an 11-month low in March as war in the Middle East pushed up prices of energy products and other inputs.

Higher oil prices have revived inflation fears and complicated the interest rate outlook for central banks. The US Federal Reserve struck a hawkish tone last week, projecting only one cut in 2026.

Traders are not cutting any rates this year, compared to two reductions expected before the conflict erupted in the Middle East. According to the CME’s FedWatch tool, expectations for a hike rose last week amid rising tensions, but were quickly tempered after Trump’s comments on Monday.

Shares in cosmetics maker Estee Lauder fell after it said it was in talks over a possible merger with Spanish beauty group Puig Brands. Barclays raised its 2026 year-end target for the S&P 500 index to 7,650 from 7,400, citing stronger earnings expectations than macro risks such as Middle East tensions, AI-driven disruption and strained private credit.