Following Monday’s brief rally, Wall Street showed hesitancy, with an initial broad-based gain giving way to a lackluster finish. The Dow Jones Industrial Average edged down 0.07%, while the Nasdaq Composite finished up 0.01%, and the S&P 500 declined 0.2%. The volatility index, or “VIX,” initially fell 11.5% to 22.50 but ultimately closed down 2.25% at 24.90, indicating that the return to calm remains fragile.
Investors are assessing whether geopolitical issues in the Middle East will resolve as quickly as suggested by some. Donald Trump stated Monday that “the war with Iran was ‘virtually’ over,” but Steve Witkoff simultaneously expressed uncertainty about the conflict’s duration.
Tehran has denied any willingness to negotiate, promising continued strikes against Israel and strategic targets, including U.S. Bases in the region, and vowed to block oil exports as long as the conflict continues. Only Chinese tankers and vessels from countries not involved in or hostile to Iran are currently permitted to transit the Strait of Hormuz.
After market close, Oracle released quarterly results that exceeded expectations, sending its stock up 8.5% in after-hours trading. The company’s performance was driven by strong demand for its cloud computing services related to artificial intelligence. Revenue reached $17.2 billion, surpassing the analysts’ average estimate of $16.9 billion.
Cloud revenue totaled $8.9 billion for the period, a 44% increase, slightly above the $8.85 billion consensus estimate from StreetAccount. Oracle also announced plans to raise between $45 and $50 billion during its fiscal year to expand its cloud infrastructure capacity. The stock has lost nearly 50% of its value since reaching its all-time high in September, amid concerns about spending and volatility in the artificial intelligence sector.
Bond market movements Tuesday were challenging to interpret. The price of West Texas Intermediate (WTI) crude oil fell from $118 to $79, a significant 24-hour shift that eased inflationary pressures. However, the future remains uncertain. The 2035 Treasury bond yield rose 3 basis points to 4.157%, and the 30-year yield increased 2.5 basis points to 4.784%. The 2-year Treasury yield, however, stabilized at 3.593%.
