Wall Street swings sharply as uncertainty increases about what will happen in the war with Iran

U.S. stocks sank Tuesday as the countdown ticked toward the latest deadline set by President Donald Trump to destroy Iranian power plants and bridges.

The S&P 500 fell 0.8% as Trump threatened that a “whole civilization will die tonight, never to be brought back again” if Iran does not meet his deadline at 8 p.m. Eastern time to open the Strait of Hormuz. Iranian officials, meanwhile, urged young people to form human chains to protect sites Trump has threatened to bomb.

The Dow Jones Industrial Average was down 370 points, or 0.8%, with an hour remaining in trading, and the Nasdaq composite was 1% lower.

The moves were tentative, much like they’ve been since the start of the war with Iran, because of deep uncertainty about when the fighting may end. During the first hour of Tuesday’s trading, the Dow careened between a gain of 74 points and a loss of 425.

Oil prices were likewise shaky. The price for a barrel of benchmark U.S. crude to be delivered in May briefly climbed above $117 before settling at $112.95, up 0.5% (all figures in U.S. dollars).

The price for a barrel of Brent crude, the international standard, to be delivered slightly later in the year, in June, eased by 0.5% to $109.27. But it’s still well above its roughly $70 level from before the war began in late February.

Oil prices have spiked because the war has snarled the production and transportation of crude in the Persian Gulf. Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran has blocked it to enemies.

The worry in markets has been that a long-term disruption will keep oil prices high for a long time and send a painful wave of inflation crashing through the global economy. Iran on Monday rejected the latest ceasefire proposal and instead said it wants a permanent end to the war.

So far in the war, Trump has made a series of threats to blow up Iranian power plants if it doesn’t open the Strait of Hormuz, only to delay it several times. The possibility remains that Trump could back down again, among other scenarios, which is keeping uncertainty high.

A year ago, Trump ultimately backed off many of the stiff tariffs that he initially threatened to put on imports from other countries, though they ended up higher than from before his second term.

“Investors are likely to remain on edge and markets unable to establish trends, probably until there is a clear outcome later this evening: a deal, the U.S./Israeli strikes intensify, or Iran’s retaliation becomes escalatory instead of proportional,” according to Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.

On Wall Street, companies with big fuel bills fell to some of the sharpest losses as high oil prices cranked up the pressure.

Norwegian Cruise Line Holdings dropped 4.8%, and United Airlines sank 3.6%.

Companies whose customers may have the least room to absorb the recent jump in gasoline prices also struggled. Dollar Tree slid 5.1%, and Dollar General fell 2.3%.

The average price for a gallon of regular gasoline across the United States has leaped to $4.14, according to AAA. It was below $3 a couple days before the United States and Israel launched attacks to begin the war in late February.

Stocks of health insurers helped limit the market’s losses after the Centers for Medicare & Medicaid Services said Medicare Advantage payments will likely see a net average increase of 2.48% in 2027. That was well ahead of what some investors expected, according to UBS analysts led by AJ Rice.

UnitedHealth Group jumped 9.6%, and Humana rose 8.8%.

Universal Music Group also helped limit losses for global stock indexes after Bill Ackman’s Pershing Square Capital Management offered to buy the record label behind Taylor Swift and Bad Bunny in a cash-and-stock deal valued at approximately $64 billion.

Pershing Square argued the proposed deal would clear uncertainty that’s weighed on UMG’s stock. Its share price in Amsterdam jumped 11.4% but remained below what Pershing said its bid is worth. That could indicate investor doubt that the deal will happen.

In stock markets abroad, indexes fell across much of Europe. Asian stock indexes were stronger, with South Korea’s Kospi up 0.8% for one of the world’s bigger gains.

In the bond market, Treasury yields held relatively steady ahead of Trump’s looming deadline. The yield on the 10-year Treasury held at 4.34%, where it was late Monday.

That’s well above its 3.97% level from before the war, and the rise has pushed up rates for mortgages and other loans going to U.S. households and businesses, which slows the economy.

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Yuri Kageyama and Matt Ott contributed.