Dow Cuts 1,277-Point Drop as Trump Tames Energy Threat: Stock Market Today
Tuesday's price action was volatile as market participants reacted to the escalating conflict between the U.S. and Iran.
Stocks fell sharply at Tuesday's open, with market participants spooked by signs of a prolonged conflict between the U.S. and Iran. However, for the second day in a row, the main indexes finished well off their intraday lows, with today's recovery courtesy of President Donald Trump's offer for risk insurance and military escorts for ships in the Strait of Hormuz.
The three main indexes were down more than 2.5% each at their session lows on Tuesday. At the close, though, the blue-chip Dow Jones Industrial Average had pared its loss to 0.8% to finish at 48,501. The broader S&P 500 was off 0.9% at 6,816 and the tech-heavy Nasdaq Composite was 1.0% lower at 22,516.
Early declines were sparked by comments from an Iranian Revolutionary Guard senior official, who said on Monday that the Strait of Hormuz, which sees roughly a fifth of global oil pass through it on a daily basis, is closed, and that Iran will shoot down any ship that attempts to pass.
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However, stocks pared most of these losses once President Trump, in a mid-afternoon post on Truth Social Tuesday, wrote that he has "ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf."
Trump added that the U.S. Navy will begin escorting tankers through the Strait of Hormuz, effective immediately.
After trading near $78 per barrel in intraday action, West Texas Intermediate (WTI) crude futures finished today up 4.7% at $74.56 per barrel.
Will the Fed shift its rate-cut plans?
Surging oil prices could impact the Federal Reserve's plans for rate cuts this year, particularly if they cause inflation to spike.
Speaking at the 2026 Bloomberg Invest conference earlier today, Minneapolis Fed President Neel Kashkari said "we need to see what this new shock, potentially new shock hitting the global economy – how long is the effect, and how big is the effect."
Kashkari added that he expects one rate cut this year, but will need to assess additional data amid the current geopolitical backdrop to see if that's still appropriate.
According to CME Group FedWatch, futures traders are currently expecting the first rate cut of 2026 to come at the Fed's July meeting.
Palantir could see 40% upside on Iran war, says Rosenblatt Securities
Palantir Technologies (PLTR), which builds artificial intelligence-driven platforms for government agencies to analyze data, gained 1.4% today and is up more than 7% for the week to date.
Rosenblatt Securities analyst John McPeake thinks the AI stock has room to run and raised his price target to $200 from $150, representing implied upside of nearly 40% to current levels.
"War regrettably underscores the value of Palantir over just another LLM [large-language model]," writes McPeake, and the Iran conflict will likely reflect PLTR's "strength and leverage."
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The price-target hike follows last Friday's directive from the Trump administration for all government agencies to stop using Anthropic's AI technologies following a disagreement over AI safety guardrails.
While the U.S. government will now use OpenAI, McPeake believes Palantir stands to benefit too.
Target booms rallies earnings beat
Wall Street also had a handful of earnings reports to sift through today. Target (TGT) was one of the strongest post-earnings performers, rising 6.7% to make it one of the best S&P 500 stocks today.
While the big-box retailer reported modest year-over-year declines in revenue and comparable sales for its fourth quarter, its earnings per share of $2.44 beat estimates.
Additionally, new CEO Michael Fiddelke, who stepped into the role in early February, said the company posted "a healthy, positive sales increase in February."
Still, Target's troubles have run deep and David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, thinks the retailer is still a show-me story at this point.
"This report doesn't convince me to start owning Target," Wagner says in emailed commentary. "The company continues to see fairly negative trends in key, higher margin categories such as Apparel and Home Furnishings."
And while Wagner recognizes that Target's 2026 outlook came in better than expected and reflects the recent sales improvement, he needs "to hear more from the New CEO, Michael Fiddelke, and his operating plans for the future."
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