Oil prices jumped on Tuesday to their highest level since the US-Iran ceasefire, pressuring US stocks as a stalled accord to reopen the Strait of Hormuz added to inflation worries. The tech-heavy Nasdaq Composite fell nearly one percent, while investors turned their attention to corporate earnings and interest rate outlooks.
Efforts to end the Middle East war appeared at a standstill, with the United States considering Tehran's latest offer to unblock the strait, and Iran saying Washington could no longer dictate terms. CNN reported that US President Donald Trump was unlikely to accept Iran's proposal, as Qatar warned of a possible "frozen conflict" without a definitive resolution.
"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.
Brent crude for June delivery rose 2.8 percent to $111.26 a barrel, while the benchmark US contract, WTI for June delivery, climbed 3.7 percent to $99.93 per barrel.
Meanwhile, major crude producer United Arab Emirates announced it will withdraw from OPEC and OPEC+ on May 1, calling it a strategic decision. Rystad Energy analyst Jorge Leon said the move is significant as, alongside Saudi Arabia, the UAE is one of the few nations with significant spare production capacity.
"While near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC and potentially more market volatility," Leon said.
Tech stocks took a hit, with shares linked to OpenAI falling after a Wall Street Journal report that the ChatGPT maker had missed targets on user numbers and revenue. Oracle, which is building massive data center capacity for OpenAI, fell more than four percent, while CoreWeave also dropped sharply.