U.S. stock futures were pointing to a stronger start on Wednesday, suggesting equities could rebound after the modest pullback seen in the previous trading session.
Oil prices have retreated following a report from the New York Times stating that the United States has delivered a 15-point proposal to Iran aimed at ending the war in the Middle East.
According to two officials familiar with the diplomatic effort, the New York Times said the proposal was transmitted through Pakistan and includes provisions addressing Iran’s ballistic missile and nuclear programs.
The report noted that it remains uncertain whether Iran will accept the proposal as a basis for negotiations, but said the move indicates the U.S. administration is stepping up its efforts to bring the conflict to an end.
As diplomatic initiatives accelerate, Iran has informed the United Nations Security Council and the International Maritime Organization that “non-hostile vessels” may pass through the Strait of Hormuz with Tehran’s approval.
Following Monday’s recovery rally, stocks delivered a relatively muted performance on Tuesday. Major indices moved unevenly throughout the session before ending the day slightly lower.
The Nasdaq dropped 184.87 points, or 0.8%, to close at 21,761.89. The S&P 500 declined 24.63 points, or 0.4%, to 6,556.37, while the Dow fell 84.41 points, or 0.2%, to finish at 46,124.06.
The volatile trading session came as oil prices rebounded, with Brent crude futures climbing back above $100 per barrel.
Brent crude had plunged nearly 11% during Monday’s trading after President Donald Trump claimed that the United States and Iran had held productive talks aimed at resolving the Middle East conflict.
However, oil prices recovered as Israel and Iran continued to exchange strikes, with reports of large explosions in Tehran and other cities. Iranian officials denied that any talks with the United States had taken place.
“Iranian people demand complete and remorseful punishment of the aggressors,” Iranian Parliament Speaker Mohammad Bagher Ghalibaf wrote in response to Trump’s remarks.
He also said Trump’s latest statements “is used to manipulate the financial and oil markets and escape the quagmire in which the U.S. and Israel are trapped.”
Iran’s foreign ministry added that Trump’s comments were “part of efforts to reduce energy prices and buy time” for military plans.
With the conflict entering its 25th day and no immediate signs of easing tensions, Saudi Arabia and the United Arab Emirates are reportedly moving closer to joining the fight against Iran, according to the Wall Street Journal.
Despite the broader market’s decline, energy stocks performed strongly as oil prices rebounded.
The NYSE Arca Oil Index climbed 2.6%, the NYSE Arca Natural Gas Index gained 1.8%, and the Philadelphia Oil Service Index rose 1.7%.
Networking stocks also extended their gains from Monday, pushing the NYSE Arca Networking Index up 1.9%.
Meanwhile, software companies came under pressure, with the Dow Jones U.S. Software Index falling 3.5% to its lowest closing level in a month.