U.S. stocks closed lower on Tuesday, with early gains evaporating as renewed concerns about the Middle East war outweighed initial optimism over a round of solid corporate earnings. Iran could attend talks with the United States in Pakistan if Washington abandons its policy of pressure and threats, a senior Iranian official told Reuters, adding that Tehran rejects negotiations aimed at surrender.
Equities extended declines late in the session after reports that the U.S. Vice President had called off his trip to Pakistan for peace talks. Stocks have rallied in recent weeks on the belief that a peace deal could be on the horizon.
The Dow Jones Industrial Average .DJI fell 293.18 points, or 0.59%, to 49,149.38, the S&P 500 .SPX lost 45.13 points, or 0.63%, to 7,064.01 and the Nasdaq Composite .IXIC lost 144.43 points, or 0.59%, to 24,259.96. The benchmark S&P index had earlier been up as much as 0.4% on the day.
Earlier economic data from the Commerce Department showed U.S. retail sales increased more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations. Retail sales jumped 1.7% last month, the largest rise since March 2025, after an upwardly revised 0.7% gain in February and above the 1.4% estimate of economists polled by Reuters. Optimism around AI and upbeat earnings have cheered investors, with first-quarter growth expectations of around 14%, according to LSEG data.
J.P. Morgan raised its year-end target for the S&P 500, citing AI and tech-driven earnings, while Amazon AMZN.O AMZN.O said on Monday it will invest up to $25 billion in Anthropic, signaling megacap companies are still willing to spend massively on the AI technology. Amazon shares closed up 0.66%. The S&P 500 energy index .SPNY .SPNY rose 1.31% as the sole advancer among the major S&P sectors due to another jump in crude prices on Middle East tensions.
UnitedHealth UNH.N UNH.N jumped 7% after the healthcare conglomerate raised its annual profit forecast and beat Wall Street expectations for the first quarter, and was the biggest boost to the Dow, contributing roughly 138 points to the upside. Apple AAPL.O AAPL.O shares also garnered attention, losing 2.52% after the company said CEO Tim Cook would hand over the reins to longtime hardware boss John Ternus.
Investors were also digesting comments from Kevin Warsh, the President’s nominee to lead the Federal Reserve, whose confirmation hearing wrapped up in the Senate on Tuesday. Warsh said he had made no promises to the White House about cutting interest rates, as he tried to assure U.S. senators mulling his confirmation to lead the U.S. central bank that he would act independently of the White House while pursuing broad reforms. Republican Senator Thom Tillis has promised to block Warsh’s confirmation until the Department of Justice ends an investigation into current Fed Chair Jerome Powell that Tillis says threatens the central bank’s independence. The impasse could affect monetary policy, especially as the President has vowed to fire Powell if he does not leave when his term ends in May.
Declining issues outnumbered advancers by a 2.67-to-1 ratio on the NYSE and by a 2.53-to-1 ratio on the Nasdaq. The S&P 500 posted 50 new 52-week highs and four new lows while the Nasdaq Composite recorded 144 new highs and 62 new lows.Volume on U.S. exchanges was 18.08 billion shares, compared with the 18.4 billion average for the full session over the last 20 trading days.
Reporting by Chuck Mikolajczak; additional reporting by Niket Nishant and Avinash P in Bengaluru; Editing by Devika Syamnath, Shinjini Ganguli, Rod Nickel.
(c) Copyright Thomson Reuters 2026.