U.S. stocks climbed sharply on Tuesday after Iran’s missile retaliation to recent U.S. strikes appeared limited in scope, calming fears of a full-blown conflict and potential disruption to global energy supplies. The market rebound was driven by investor relief that Tehran avoided targeting critical oil infrastructure.
The Dow Jones Industrial Average, S&P 500, and Nasdaq all closed in positive territory, with energy and defense stocks showing notable gains. Analysts say the market interpreted Iran’s response as calibrated rather than escalatory—signaling a potential de-escalation phase in the volatile Middle East standoff.
Oil prices, which had spiked briefly on initial news of the strikes, stabilized as reports confirmed that no major oil facilities or shipping lanes were hit. Brent crude and WTI futures edged slightly lower by the close of trading, reflecting the reduced risk premium.
Traders and analysts are now watching for any follow-up diplomatic moves, particularly from Washington and key Gulf states. While volatility remains, the easing of immediate energy concerns has temporarily restored confidence in the markets—at least until the next geopolitical headline.
