US stocks today: US markets plunge as Middle East concerns offset earnings optimism

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 U.S. Vice President JD Vance ‌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.

“There’s two things going on – what is the resolution going to be or the path going to be for Iran, but in the meantime if that wasn’t there, you’ve got really good expectations for earnings coming in and the companies are pretty much reporting that way, and the economy is doing fine,” said Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta.

“The wild card is indeed what happens with Iran, and nobody knows, and it’s baffling to me to think that people think that it’s going to be OK.”

The Dow Jones Industrial Average fell 292.96 points, or 0.59%, to 49,149.60, the S&P 500 declined 45.09 points, or 0.63%, to 7,064.05, and the Nasdaq Composite dropped 144.43 points, or 0.59%, to 24,259.96. 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.

EARNINGS, AI REASSURE INVESTORSOptimism 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 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. The S&P 500 energy index rose as the ‌best-performing among the major S&P sectors due to another jump in crude prices on Middle East tensions. UnitedHealth jumped 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. Apple shares also garnered attention, losing ground after the ⁠company said CEO Tim Cook would hand over the reins to longtime hardware boss John Ternus.

WARSH HEARINGInvestors were also digesting comments from Kevin Warsh, Trump’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 President Donald Trump 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 impact monetary policy, especially as Trump has vowed to fire Powell if he does not leave when his term ends in May.