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Update: Equities Fall, Oil Advances as Hope Dims for Hormuz Reopening

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Update: Equities Fall, Oil Advances as Hope Dims for Hormuz Reopening

(Updates with latest market prices and developments.)

US benchmark equity indexes fell intraday and oil prices extended their rally amid growing uncertainty around the reopening of the Strait of Hormuz.

The Nasdaq Composite was down 0.6% at 26,436.2 after midday Tuesday, while the S&P 500 lost 0.3% to 7,727.5. The Dow Jones Industrial Average slipped 0.2% to 53,871.7. Among sectors, communication services saw the steepest decline, while energy paced the gainers.

Secretary of Iran's Supreme National Security Council Mohsen Rezaei said Tuesday that the Strait of Hormuz will remain closed as long as the US does not accept Tehran's conditions, Reuters reported.

Previously, Pakistan's Defense Minister Khawaja Asif told Bloomberg that the US and Iran were close to "some sort of an arrangement."

Iran has reportedly laid out new terms for reopening the Strait of Hormuz, including a permanent end to the war against Tehran and its allies, as well as demanding full compensation for war damages. In response, US President Donald Trump on Monday demanded compensation for those he claimed were killed and wounded by Iran's attacks.

Trump recently indicated to the media that he's prepared to exert greater economic pressure on Iran instead of launching another military attack.

"Uncertainty over a US-Iran deal to end the war and reopen the Strait of Hormuz has grown after Trump demanded compensation for victims of Iranian-backed conflicts, responding to Tehran's reparations demands," Saxo Bank said Tuesday in a report. "The tougher stance lowers chances of a near-term agreement and keeps markets wary, as Iran ties any Hormuz deal with Oman to a broader accord with the US and Trump opts for economic pressure over new strikes."

West Texas Intermediate crude oil was up 1.2% at $83.14 a barrel intraday, while Brent advanced 1.1% to $88.68. The US crude oil benchmark was on track for its fourth consecutive day of gains, while Brent is poised to stretch its rally to a fifth session.

US Treasury yields were lower intraday, with the two-year rate down 1.5 basis points at 4.22% and the 10-year rate shedding 1.6 basis points to 4.68%.

In company news, Nvidia (NVDA) said it partnered with six major financial institutions to raise more than $500 billion in third-party capital for artificial intelligence infrastructure.

The tech bellwether signed memorandums of understanding with Apollo (APO), BlackRock (BLK), Blackstone (BX), Brookfield (BN), Goldman Sachs (GS) and KKR (KKR) to establish independent compute financing platforms, it said late Monday.

KKR shares jumped 6.7%, the best performer on the S&P 500. Apollo advanced 6.4%, the second-biggest gain on the index. Blackstone rose 4.3%, while BlackRock, Brookfield and Goldman were also higher. Nvidia was up 0.1%.

AppLovin (APP) slumped 5.3%, the worst performer on the S&P 500, following a rating downgrade from BofA Securities.

Sea (SE) reported stronger-than-expected second-quarter revenue as the Singapore-based company logged sharp annual gains in its e-commerce platform and the digital financial services business. Its shares jumped 14% intraday.

Lumentum (LITE), CoreWeave (CRWV) and Super Micro Computer (SMCI) are scheduled to release their earnings reports after the markets close on Tuesday.

In economic news, existing home sales in the US declined more than expected last month as rising prices and mortgage rates continued to weigh on homebuying activity, data from the National Association of Realtors showed.

Spot gold edged down 0.4% to $4,372.79 per troy ounce, while silver dropped 0.5% to $64.97.

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