Oil prices climbed again Tuesday and Wall Street pulled back from record territory after an Iranian official said the Strait of Hormuz will not reopen until Tehran's conditions are met, deepening a standoff that has rattled energy markets for days.

U.S. crude futures rose past $83 a barrel, up roughly 1.8% on the day, while global benchmark Brent crude gained about 1.4% to near $89, according to CNBC. The Strait of Hormuz, a narrow chokepoint through which roughly a fifth of the world's oil supply normally passes, has been effectively closed amid the standoff between Washington and Tehran.

The S&P 500 extended a pullback from last week's record highs as traders avoided riskier bets ahead of Wednesday's consumer inflation report, which could shape the Federal Reserve's next move on interest rates.

ROUGHLY A FIFTH OF THE WORLD'S OIL NORMALLY FLOWS THROUGH THE STRAIT OF HORMUZ

Mixed Signals on a Deal

Not every signal pointed toward escalation. Pakistan's Defense Minister Khawaja Asif told Bloomberg that "things are shaping up again in favor of a peace arrangement or a deal," a sign back-channel diplomacy may still be alive even as Iranian officials publicly hold the line, according to CNBC. Markets have whipsawed for days on exactly this kind of conflicting signal.

Beyond energy, Tuesday's trading also reflected a mixed bag of corporate news: chipmaker Jabil was upgraded on expectations of an AI-driven growth cycle fueled by spending from Amazon, Meta and Google, while flying-taxi startup Joby Aviation slid after agreeing to acquire Resonant Sciences for $500 million. AI-infrastructure firm Nebius climbed on guidance for more than $2 billion in second-half revenue.

Separately, the National Federation of Independent Business said its small-business optimism index rose to 99.8 in July, its best reading since August 2025 — a rare bright spot on an otherwise jittery trading day, according to Yahoo Finance.

Analysts said markets are likely to stay volatile until there is clarity on either a Hormuz resolution or Wednesday's inflation numbers, whichever comes first.

The Strait of Hormuz sits between Iran and Oman and is the only sea route out of the Persian Gulf for tankers carrying crude from Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Iran itself. A prolonged closure tends to ripple quickly into gas pump prices in the U.S. and beyond, since even a partial disruption to that much daily supply forces buyers to bid up whatever crude is still moving freely. Energy traders have been closely tracking shipping-insurance rates through the strait as a real-time gauge of how seriously the market is taking the standoff.

For now, oil remains well off the highs seen during past Hormuz scares, but traders say another week of stalemate could change that calculus quickly.