Oil prices tumbled for a fourth straight session on Tuesday and US stocks slipped from record highs, as investors bet that the framework deal between Washington and Tehran will bring Iranian crude back to world markets and turned their attention to the Federal Reserve’s policy meeting. West Texas Intermediate, the US benchmark, fell to around $76 a barrel, while Brent dropped below $80 for the first time since early March.
Both grades have now surrendered nearly all of the war-risk premium that spiked when the Strait of Hormuz was closed last month. Energy shares led the declines: Exxon Mobil and Chevron each fell more than 2.5%, while APA, Devon Energy, Marathon Petroleum and EOG Resources dropped between 3% and 4%.
The S&P 500 ended down 0.49% at 7,517.55, retreating from Monday’s record close, and the Nasdaq Composite fell 0.93% to 26,435 as chipmakers slid. The Dow Jones Industrial Average bucked the trend, rising 0.68%, or about 351 points, to 52,022, helped by gains outside the technology sector. The small-cap Russell 2000 eased 0.56%.
The moves came as the Federal Open Market Committee began a two-day meeting — the first chaired by Kevin Warsh, the Trump-backed economist who took over the central bank this year. Policymakers are widely expected to leave the federal funds rate unchanged in a range of 3.50% to 3.75% when the decision lands on Wednesday.
But the outlook beyond this meeting has grown murkier. While falling oil eases one source of inflation, traders have begun pricing in the possibility of rate increases later in 2026 if the energy-driven price pressures of recent months prove sticky. Warsh’s first post-meeting news conference will be parsed for any shift in tone toward the President’s repeated calls for lower rates.
The catalyst for Tuesday’s oil slide was a report that the US-Iran memorandum of understanding would allow Tehran to resume crude exports immediately, accelerating the timeline traders had assumed for additional barrels. Questions remain about how quickly the Strait of Hormuz will fully reopen, and that uncertainty kept equity moves choppy through the session.
Markets are weighing competing forces: the relief of a Middle East ceasefire and cheaper energy against the prospect that the Fed, under new leadership, keeps policy tighter for longer. Treasury yields were little changed ahead of the rate decision, and the dollar held broadly steady.
For consumers, the retreat in crude is already feeding through to wholesale fuel prices, offering some relief at the pump heading into the US summer driving season after weeks of volatility tied to the conflict.