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Stocks surged on Wednesday after the U.S. and Iran agreed to a two-week ceasefire.
Credit: Angela Weiss / AFP via Getty Images

Key Takeaways

• Stocks surged and oil prices plummeted on Wednesday after the U.S. and Iran agreed to a two-week ceasefire, stoking optimism that the conflict and its subsequent oil shock will end soon.
• Some experts warn the obstacles to a lasting peace are sizable, and recommend investors continue to exercise ample caution.

After six weeks of holding their breath, investors are letting out a big sigh of relief—and buying stocks.

President Donald Trump late Tuesday— just 90 minutes before his deadline for Iran to reopen the Strait of Hormuz or face destruction— announced a two-week ceasefire. Wall Street on Wednesday was optimistic that the pause in fighting could pave the way to a resolution of the conflict that’s created one of the worst oil shocks in history and weighed heavily on stocks.

The S&P 500 was recently up 2.5% to its highest level in a month. Crude oil futures, meanwhile, plummeted more than 15% and Treasury yields dropped sharply. (Follow Investopedia's coverage of today's trading here.)

Why This Is Important

The war in Iran has weighed on stocks for the past six weeks because of soaring oil prices and uncertainty about its direction and duration. Tuesday's ceasefire has eased oil prices, but experts warn it does little to alleviate uncertainty looming over markets beyond the next two weeks.

The ceasefire announcement "strongly sets the stage for near-term peace in the Middle East,” wrote analysts at Wolfe Research in a note on Wednesday in which they said they expected the S&P 500 to head back toward its record high around 7000. "We dial up risk exposures," they wrote.

“Breaching 7,000 feels likely as euphoria returns to markets,” wrote Andrew Tyler, JPMorgan’s had of global market intelligence.

Stocks had fallen nearly 8% during the war, weighed down by soaring oil prices and uncertainty about the conflict’s impact on inflation, consumer spending, and interest rates. A relief rally last week and Wednesday’s gains put stocks just a couple of percentage points off their pre-war levels. 

“Strong fundamentals can shine through when geopolitical clouds clear,” said Jeff Buchbinder, chief equity strategist at LPL Financial, on Wednesday. Even when there was no end to the war in sight, Wall Street was optimistic about the upcoming earnings season, during which analysts expect S&P 500 companies to report double-digit profit growth as a group.  

Big Tech’s AI infrastructure spending, a tailwind for the economy and stocks before the war began, is expected to continue to support healthy growth and stock returns. “We’d be buying [Technology, Media, and Telecoms] with a Semis focus (market leadership), Industrials (AI thematic), and Discretionary (names levered to lower gas prices) on this bounce,” wrote Wolfe’s analysts. 

Some investors, however, remain cautious, mindful that events could turn.

“A near-term reprieve in the Iran conflict will not erase medium-term and strategic tensions,” wrote Felix-Antoine Vezina-Poirier, chief strategist of Daily Insights at BCA Research. Iran’s nuclear program and its control of the Strait of Hormuz remain large hurdles to a lasting agreement, he wrote.

Iranian proxies like Hezbollah in Lebanon, where Israel continued to fight on Wednesday, are another factor that could break the fragile ceasefire, wrote Rich Privorotsky, a partner at Goldman Sachs, on Wednesday. 

“I struggle to see new highs for equities,” wrote Privorotsky. For clarity on the stock market outlook, investors will be closely watching “actual flows through the Strait over time,” wrote Privorotsky. 

The ceasefire may not return oil flows in the Persian Gulf back to normal. Iran’s foreign minister on Tuesday said “safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” suggesting oil tankers could continue to pay Iran tolls—perhaps even in crypto—to transit the strait, a situation experts say the U.S. is unlikely to accept long-term.

Still, some see in the ceasefire good reason to be optimistic the U.S. is serious about a lasting end to the conflict. "It’s become more and more evident that President Trump wants an off-ramp," wrote Wolfe's analysts. With the president appearing more amenable to Iran's demands than previously thought, they added, "we believe the near-term market bottom is in."

A view of the vessels passing through Strait of Hormuz following the two-week temporary ceasefire reached between the United States and Iran on the condition that the strait be reopened, seen in Oman on April 8.
Credit: Shadi J. H. Alassar / Anadolu via Getty Images

Key Takeaways

• Stock markets rose, and oil prices fell on Wednesday after President Donald Trump announced a two-week ceasefire in the Iran war.
• Further improvements in the economic outlook depended on whether ships could safely navigate the crucial Strait of Hormuz between Iran and Oman.
• Motorists can expect gas prices to fall a few cents a gallon each day if the situation stays stable, one expert said.

The outlook for energy prices and the economy hinges on whether a two-week cease-fire holds and shipments of energy and other supplies resume from the Persian Gulf.

Traders breathed sighs of relief Tuesday night after President Donald Trump said he and Iranian leaders had agreed to stop fighting for two weeks to negotiate an end to the five-week old Iran war. The conflict has pushed up energy prices, raised recession risks, and stoked economic uncertainty, in addition to the lives lost on both sides.

The popular S&P 500 stock index was up 2.4% Wednesday afternoon, still short of its prewar highs. Brent crude oil, the international benchmark price, was down 13% to $94 a barrel on hopes that Iran would allow petroleum shipments to resume through the Strait of Hormuz, the crucial waterway through which 20% of the world's crude supply usually flows. That was still above its prewar price of around $70 in late February, but well below the $130-$140 range that some economists consider high enough to threaten sending the U.S. economy into a recession.

What This Means For The Economy

The ceasefire is welcome news for an economic outlook that's been shaken up by the war against Iran, which has spiked energy prices and raised the possibility of a recession.

The developments could begin to reverse the surge of energy prices that has plagued U.S. household budgets in the last month. With oil prices falling, gasoline prices should follow suit, Patrick DeHaan, head of petroleum analysis at GasBuddy, posted on the X social media platform.

Motorists can expect price drops to begin gathering momentum over the weekend, falling 1 to 3 cents per gallon each day if the situation doesn't change. Prices for gas and diesel have risen by more than a dollar a gallon since the war began, potentially sending an inflation shockwave across a wide range of products due to higher transportation costs.

The ceasefire was an about-face in the trajectory of the war. Just hours before, Trump threatened to escalate the fighting by blowing up bridges and power plants in Iran, and warned that "a whole civilization will die tonight" if the Iranians did not agree to a truce.

The situation is still volatile and could easily turn in a different direction just as quickly. The progress risks being derailed if the truce does not hold, or traffic through the strait does not resume. Ship traffic through the strait was still mostly blocked on Wednesday, Bloomberg reported, citing tracking data compiled by the outlet.

Trump stoked further uncertainty Wednesday when he said the U.S. would impose a 50% tariff on countries that sold weapons to Iran.

The social media announcement did not specify which countries would have to pay the new import tax or provide any other details. Since Trump took office for the second time last year, frequent tariff announcements and policy changes have fueled uncertainty among business leaders, causing companies to put hiring and expansion plans on hold and creating a major headwind in the job market.

Major oil stocks led decliners in the S&P 500 Wednesday
Credit: Brandon Bell / Getty Images

Key Takeaways

• A two-week ceasefire deal drove major stock indexes higher Wednesday, but some stocks lost ground.
• Oil stocks led decliners amid expectations that the opening of the Strait of Hormuz will ease pressures on global oil supplies.

Markets rallied Wednesday on the news of a two-week ceasefire in Iran, but some stocks bucked the trend.

Major oil producers' stocks led decliners on the S&P 500 Wednesday, as oil prices slid on expectations of easing supply pressures. Shares of APA Corp. (APA) dropped close to 10%, while ExxonMobil (XOM), ConocoPhillips (COP), Marathon Petroleum (MPC), and Occidental Petroleum (OXY) slipped around 5%. Chevron (CVX) shares fell about 4%.

West Texas Intermediate crude, the U.S. benchmark, plunged nearly 15% to about $96.53 a barrel, while Brent crude, the global benchmark, sank 13% to $94.75 per barrel.

Why This Matters to Investors

Though most stocks got a boost from Wednesday's relief rally, some that had benefitted from supply disruptions related to the war lost ground.

Shares of several chemical and fertilizer companies, including Dow Inc (DOW), LyondellBasell Industries (LYB), and CF Industries (CF), also fell Wednesday.

The stocks had rallied in recent weeks as soaring oil prices gave some companies that produce goods with natural gas a cost advantage, while fertilizer prices also jumped as much of the world's fertilizer travels through the Strait of Hormuz.

Still, oil prices have a way to fall before returning to their levels before the war in Iran began, suggesting Americans could continue to face high prices for gas and other goods in the near term.

This article has been updated since it was first published to reflect more recent prices.

A new investigation purports to name the mysterious creator of bitcoin known as Satoshi Nakamoto.
Credit: Getty Images

Key Takeaways

• The price of bitcoin closed in on $73,000 as the U.S. agreed to a two-week Iran ceasefire proposal from regional mediators; crypto-linked stocks including Coinbase, Circle, Strategy, and Robinhood are also climbing.
• Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is back in the headlines. A new investigation names British cryptographer Adam Back, who denies it.

Bitcoin has some "main character energy" today. Satoshi Nakamoto isn't far behind.

The pseudonymous creator of bitcoin, the world's best-known cryptocurrency, is once again a hot topic after the New York Times published a story suggesting that British cryptographer Adam Back was Satoshi. Back denies it, leaving the mystery alive for many, but that hasn't stopped the real-time dissection of the story, which examined Back's and Satoshi's writing patterns, among other factors.

Bitcoin, meanwhile, is getting another lift, aided by developments—including a tentative ceasefire between the U.S. and Iran—that have sparked a relief rally in risk assets. The price of bitcoin headed toward $73,000 early Wednesday before paring gains. Altcoins such as eth and sol, as well as crypto-linked stocks including Coinbase (COIN), Circle (CRCL), Strategy (MSTR) and Robinhood (HOOD), also got a boost.

WHY THIS MATTERS TO YOU

The passage of a key crypto bill called the Clarity Act has been seen as a near-term catalyst that could get bitcoin prices moving higher again. In the meantime, some smaller developments may put a bit of wind in crypto's sales.

So did the list of ways investors can trade bitcoin. Morgan Stanley's comparatively low-cost spot bitcoin fund launched today under the symbol "MSBT," potentially ushering in more advisor-driven capital to the digital asset. Bloomberg ETF analyst said it was "arguably the biggest btc launch" since spot bitcoin ETFs debuted in January 2024, predicting that it could gather assets of $5 billion in its first year.

As a group, the ETFs had roughly $90 billion in assets under management as of Tuesday evening, according to crypto data firm Coinglass.

Washington, meanwhile, may have handed crypto a small assist. The long-awaited crypto bill known as the Clarity Act has stalled over disagreements about how stablecoin rewards should work, with the crypto industry and the banking sector at odds. The White House's Council of Economic Advisers published a 21-page presentation with the takeaway that stablecoin rewards would have minimal impact on banks.

"A yield prohibition would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings," the report said.

This rally in bitcoin could be short-lived, according to some market watchers. "I still view this as a bear market rally," said Sean Farrell, Fundstrat's head of digital strategy, said in a report yesterday. "But the combination of easing geopolitical risk, falling crude, and improving positioning creates a constructive near-term backdrop that I am not rushing to fade."

Finally, there might be a bullish nugget in the possibility that, under an Iran agreement, ships passing through the Strait of Hormuz will pay a toll in crypto. Iran's oil exporters' union told the Financial Times that Iran intended to require $1 per barrel of oil, paid in bitcoin, from ships using the strait during the two-week ceasefire.

This article has been updated since it was first published to add information and context.

Wednesday's gains have Levi Strauss shares back in positive territory in 2026.
Credit: Joel Saget / AFP / Getty Images

Key Takeaways

• Levi Strauss shares are once again into the green for the year after the clothing brand beat estimates in its first-quarter results.
• CFO Harmit Singh said the company's "strategic transformation" is improving its margins, as Levi Strauss also lifted its sales and profit outlook for the year.

Levi Strauss is back in positive territory for the year.

How'd it happen? Partly because of a jump this morning. Shares of Levi Strauss (LEVI) were up some 10% in recent trading after the apparel maker, known for its iconic denim, reported better-than-expected results for the first quarter after markets closed yesterday. The move extended a steady climb that began in mid-March.

Levi Strauss posted first-quarter revenue of $1.74 billion with adjusted earnings per share of 42 cents, both figures coming in above what analysts had forecast.

Why This Matters to Investors

Levi's solid start to the year could improve investor confidence in the clothing company's ability to continue growing sales after tariff concerns pressured the stock last year.

"Our strategic transformation is translating into higher returns and more profitable growth, enabling us to convert more of our strong revenue growth into bottom-line profit," CFO Harmit Singh said in Tuesday's release.

The company also lifted its full-year outlook, with its new adjusted EPS forecast of $1.42 to $1.48 topping the analyst consensus. Sales growth is expected to come in between 5.5% to 6.5% this year, up from 5% to 6% previously.

Levi Strauss has looked to grow its direct-to-consumer sales and expand its product offerings beyond its blue jeans in recent quarters as it has looked to build on a resurgence in demand for denim. The company has made some strategic moves, completing its sale of the Dockers brand in the first quarter after announcing a sale to Authentic Brands Group for at least $311 million last May.

Levi Strauss also said it has started a search for a new CFO. Singh is set to stay on until a successor is found before transitioning to a special advisor role and then retiring.

With Wednesday's gains, Levi's shares are now up about 5% since the start of the year.

Airlines and other travel-related stocks were among the biggest gainers on the S&P 500 Wednesday
Credit: Michael M. Santiago / Getty Images

A two-week ceasefire deal sent stocks soaring Wednesday.

The S&P 500, Nasdaq, and the Dow Jones Industrial Average all climbed close to 3%, after President Donald Trump posted on Truth Social Tuesday that the U.S. agreed "to suspend the bombing and attack of Iran for a period of two weeks" following a 10-point proposal seen as a "workable basis on which to negotiate."

Airlines and other travel-related stocks were among the biggest gainers on the S&P 500, as oil prices eased. Shares of major oil producers slid along with the prices of the commodities.

How This Impacts Investors' Portfolios

Growing optimism about a coming resolution to the war in Iran sent stocks higher across a wide range of industries, with some experts suggesting it could mean more gains ahead for broader markets.

Airline, Cruise Stocks Jump as Oil Prices Fall

Major airline stocks took off on hopes of a better outlook for fuel prices. United Airlines Holdings (UAL), American Airlines Group (AAL), and Delta Air Lines (DAL) jumped about 8%, 6%, and 4%, respectively. Cruise line operator Carnival Corp. (CCL) popped 11%, while Norwegian Cruise Line Holdings (NCLH) added 8%, and Royal Caribbean Cruises (RCL) rose 4%.

Oil Stocks Follow Commodity Prices Lower

West Texas Intermediate futures, the U.S. crude oil benchmark, plummeted 15% to about $96.53 a barrel, while Brent crude, the global benchmark, sank 13% to $94.75 per barrel. Energy stocks dropped along with the price of oil, with Chevron (CVX) and ExxonMobil (XOM) down between 4% and 5%.

Crytpo-Related Stocks Rise as Bitcoin Climbs

Bitcoin, the world's biggest cryptocurrency, was trading around $71,500 recently, up from its overnight low around $69,000. Shares of crypto-tied companies Robinhood Markets (HOOD), Strategy (MSTR), and MARA Holdings (MARA) climbed between 3% and 6%.

Beaten-Down Tech Stocks Rebound

Tech stocks, which have suffered in recent weeks, surged Wednesday to rank among the best-performing sectors in the S&P 500. With the exception of Tesla (TSLA), which slipped 1%, most of the Magnificent Seven members gained. Meta Platforms (META) was the biggest winner of the group, with shares up nearly 7% after the social media company announced its latest AI model.

Experts Say Ceasefire Points to Improving Outlook for Markets

The outlook for stocks "has clearly improved with this ceasefire" said LPL Financial Chief Economist Jeffrey Roach in a statement Wednesday.

Analysts at Wolfe Research led by Chris Senyek said they believe the deal "strongly sets the stage for near-term peace in the Middle East" and further upside for markets. They'd be buying tech stocks, the analysts wrote in a note to clients Wednesday, with a focus on semiconductors, industrials, and discretionary stocks, as well as groups that would benefit from lower long-term rates such as housing stocks.

"We believe the near-term market bottom is in."

This article has been updated since it was first published to reflect more recent prices.

News of the day for April 8, 2026

The major indexes ended Tuesday mixed with investors uncertain about what would happen next in the Iran conflict.
Credit: Charly Triballeau / AFP / Getty Images

Stocks are rallying premarket, and oil prices are falling, after news of a reprieve in Iran.

The U.S., Israel, and Iran have agreed to a two-week ceasefire while longer-term peace talks take place; Minutes from last month's Federal Reserve meeting are due out today, giving investors a look at where central bank officials see interest rates heading; Delta Air Lines shares are gaining after the airline beat first-quarter estimates; Levi Strauss stock is also surging after the denim giant topped its own first-quarter projections and raised its full-year outlook.

Here's what you need to know today.

Stocks Soar on Iran Ceasefire Announcement

Stock futures are surging this morning as markets rally on news of a two-week ceasefire between the U.S., Israel, and Iran. Futures tied to the Dow Jones Industrial Average and S&P 500 were up more than 2.5%, while Nasdaq 100 futures are more than 3% higher. The indexes ended yesterday mixed amid uncertainty about how a Tuesday-night deadline would play out. Gold futures are rising nearly 3% to above $4,800 an ounce, while the 10-year Treasury yield is sinking to 4.25% from yesterday's close of 4.30%. Bitcoin is trading around $71,500 this morning after briefly surpassing $72,000 last night following the ceasefire announcement.

US, Israel, Iran Agree to Two-Week Ceasefire; Oil Falls

Crude oil prices are plummeting, down 16% to $94.50 per barrel, amid optimism that the Strait of Hormuz will be reopened. President Donald Trump last night first pushed back his deadline for attacks on Iran—which he had said might lead to "a whole civilization" dying—by two weeks, saying the U.S had received a "workable" 10-point peace proposal from Iran. Reports later emerged about various details of the plan, including the likelihood that Iran could charge ships to pass through the strait. It also remained uncertain exactly when the ceasefire would start or whether it includes Israel's fighting in Lebanon. The Associated Press reported early this morning that Iran has launched new attacks on other countries in the region, and that an oil refinery on Iran's Lavan Island was attacked hours after the ceasefire was announced. Talks of a longer-term peace deal are reportedly set to begin Friday.

Federal Reserve's March Meeting Minutes Due Out Today

Investors will get some insights into the mindset of members of the Federal Reserve's Open Market Committee (FOMC) today. The release of minutes from last month's meeting on interest rates are due out at 2 p.m. ET. Investors read the minutes closely for hints on what Fed governors are thinking about where interest rates could go in the coming months. The Iran war will likely have a significant impact on the Fed's decision-making, as the war is likely to have stoked inflation. Investors will get a detailed look at inflation trends with the Consumer Price Index report for March scheduled to be released Friday.

Delta Stock Pops as Results Top Estimates

Delta Air Lines (DAL) stock is gaining 11% premarket after the airline beat first-quarter estimates. Delta said Wednesday it earned an adjusted 64 cents per share on revenue of $15.9 billion in the first quarter, both topping the analyst consensus compiled by Visible Alpha. CEO Ed Bastian said the company has taken steps including reducing flight capacity growth to account for the soaring fuel costs caused by the Iran war, and said that will likely continue until the fuel price environment improves. Delta and other travel stocks were up ahead of the announcement as investors cheered the idea that plummeting oil prices and a ceasefire in Iran should help ease fuel-price pressures.

Levi Strauss Stock Surges on Solid First Quarter, Raised Outlook

Shares of Levi Strauss & Co. (LEVI) are also up more than 11%. The apparel maker reported better-than-expected results for the first quarter after markets closed yesterday. Levi Strauss posted first-quarter revenue of $1.74 billion with adjusted earnings per share of 42 cents, both figures coming in above what analysts had forecast. The company also lifted its full-year outlook, with its new profit forecast topping the analyst consensus.

Intel's terafab partnership with Elon Musk's companies could represent a step forward for the chipmaker
Credit: Intel

Key Takeaways

• Intel said Tuesday it's joining Elon Musk's terafab project with SpaceX, xAI and Tesla.
• The agreement adds to a string of recent deals for the chipmaker.

Intel has another deal to add to its recent wins.

The latest will have the chipmaker join Elon Musk's terafab project—alongside SpaceX, xAI and Tesla—to design, fabricate, and package chips that will help power the companies' AI ambitions, the chipmaker said in an X post Tuesday.

Shares of Intel (INTC) finished 4% higher Tuesday following the news, adding to the stock's recent rally. Tesla (TSLA) shares slipped about 2%. (Broader markets finished the day mixed, making small moves by the close, amid worries about an escalating war in Iran.)

Why This Is Significant

The terafab partnership could represent a step forward for Intel, which has struggled to win new customers for its manufacturing business.

The agreement marks the latest in a string of high-profile deals for Intel in recent months, including one with leading AI chip designer Nvidia (NVDA), after the U.S. government took a stake in the struggling chipmaker last year.

Reports have suggested that agreements with former client Apple (AAPL), Alphabet's Google (GOOGL), and Amazon (AMZN) could soon follow, along with an expanded partnership with Nvidia.

For Elon Musk's companies, having Intel on board could help speed up and lend more experience in chipmaking to the project, along with potential political goodwill.

Earlier this month, Morgan Stanley analysts had called the terafab a "herculean task" that "even under an aggressive scenario" might not be ready to start producing chips until mid-2028.

Rising fuel prices are expected to have stoked inflation in March.
Credit: Joe Raedle / Getty Images

Key Takeaways

• Consumer prices are forecast to have risen 1% in March, one of the steepest monthly inflation spikes on record and the largest since June 2022.
• Surging oil prices have driven up gasoline prices, putting upward pressure on the Consumer Price Index.
• Price hikes are likely to be larger the longer the war against Iran continues and the crucial Strait of Hormuz stays virtually closed to ship traffic.

Consumer prices likely rose swiftly in March as the Iran war pushed up gas prices, making it one of the sharpest inflation spikes in history.

Economists expect Friday's scheduled report on the Consumer Price Index will show inflation rose 0.9% in March, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Prices have risen 0.9% or more in a month only 16 times since 1981.

The month-over-month jump would result in a 3.3% annual increase in the cost of living, as measured by the CPI, the highest since April 2024, economists forecast.

What This Means For The Economy

Surging prices for gasoline restrict household budgets, redirecting money and damaging consumer spending, while higher inflation pressures the Federal Reserve to keep its key interest rate higher for longer, pushing up borrowing costs on all kinds of loans. Both of those trends weigh down economic growth.

A report in line with expectations would highlight the economic costs of the war against Iran, which has sharply pushed up energy prices. The conflict has closed the Strait of Hormuz between Iran and Oman, the crucial waterway through which 20% of the world's oil supply usually flows.

That's pushed up oil prices, and in turn gasoline and diesel fuel, which have risen by more than $1 a gallon over the five weeks of the war. Economists say the price hikes will get worse the longer the war goes on and will likely spread to other products as transportation companies pass on higher fuel costs to customers.

"The impact of the energy price shock will be on full display," Jim Reid, head of macro research at Deutsche Bank, wrote in a commentary.

PCE Also Provided Clues

A report Thursday from the Bureau of Economic Analysis provided another, albeit dated, look at inflation.

Prices as measured by Personal Consumption Expenditures rose 2.8% over the year in February, in line with the expectations of economists.

Core prices, excluding volatile food and energy costs, rose 3% over 12 months, down from a 3.1% annual increase in January. Core PCE is especially significant because that's the benchmark officials at the Federal Reserve use to judge whether inflation is running at the central bank's target of a 2% annual rate.

The PCE reports are usually published weeks after the CPI. However, they are currently further behind schedule because of the extended government shutdown last year.

Even before the war in Iran, tariffs had pushed up prices on imported products, keeping inflation above the 2% target, although cooling housing costs had kept overall inflation from rising severely. In the coming months, however, the inflation outlook largely depends on how long the Iran war continues to restrict oil and other resource supplies from the Persian Gulf.

Update, April 9, 2026—This story has been updated after publication to include data from the Personal Consumption Expenditures price index released Thursday. The story was originally published April 7, 2026.

Stocks retreated Tuesday, though they climbed a bit of intraday lows.
Credit: Charly Triballeau / AFP via Getty Images

Key Takeaways

• Markets were down, and then up again, in the hours before President Trump's Tuesday-evening deadline for Iran.
• Retail investors' post-Easter positioning suggests they are getting more defensive, according to Vanda data.

Traders were worried—and then more hopeful—ahead of President Donald Trump's Tuesday evening deadline.

Broad U.S. market indexes were in the red in the late-Tuesday hours, but the S&P 500 and the Nasdaq eked out slight gains by the market's close as the prime minister of Pakistan made a plea to the U.S. ahead of a stated 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz, a key trade passageway. "To allow diplomacy to run its course, I earnestly request President Trump to extend the deadline for two weeks," Shehbaz Sharif said in a social media post Tuesday afternoon.

Crude oil prices that had been gaining, then retreated, and energy stocks finished slightly higher. Consumer discretionary and consumer staples were among the worst-performing sectors in the S&P 500.

Tuesday's moves show how difficult it has been for investors to navigate the markets amid the war. The Cboe Volatility Index, also known as Wall Street's fear index, was around 27 after rising throughout the day, though it's below levels generally seen as predicting high volatility. CNN's Fear and Greed Index was recently at "extreme fear" levels.

The path to the end of the war in Iran has been difficult to discern, and retail investors have started to lean away from U.S. stocks. They're still buying, but that cohort's positioning would appear to be "shifting more defensively," according to Vanda data. Flows into the State Street SPDR S&P 500 ETF (SPY) and the Invesco QQQ ETF (QQQ), which holds the tech-heavy Nasdaq 100 stocks, have abated over the last five days, while money keeps going into the iShares 0-3 Month Treasury Bond ETF (SGOV).

WHY THIS MATTERS TO YOU

Market experts have warned against sinking into a defensive crouch or "buying the dip" reflexively, yet that would appear to be what's happening as a quick end to the war in Iran becomes illusory.

Morgan Stanley has become more defensive with new money coming in from its high-net worth clients. The firm's Kathleen Entwistle, who specializes in high-net worth investing, told CNBC last week that the firm was prioritizing downside protection and that it likes cash in the short-term because of the uncertainty produced by the war in Iran.

"You've got to get in before the war ends, but it's a little bit tricky right now," she said.

Though the U.S. and Iran could agree to regional mediators' proposal for a truce, it could prove momentary, according to BCA Research chief strategist Felix Vezina-Poirier.

"A temporary de-escalation remains possible, with talk of a 45-day ceasefire and evidence that traffic through the Strait of Hormuz has picked up," he said in a report on Tuesday. But a "framework in which Iran keeps its nuclear program while retaining leverage over access through Hormuz is not one the US, Israel or Gulf allies would accept on a lasting basis."

Vezina-Poirer added that it is a difficult time to invest in risk assets, such as stocks, given sensitivities to incremental developments around the war in Iran and how quickly markets can turn on headlines. But he also said that stocks could climb even if the war continues, and especially if the Strait shows "credible signs" of reopening.

This article has been updated since it was first published to reflect new information and market data.