Iran Peace Rumor, Canada Tariffs, Fed Signals Drive Markets Tuesday
A vague Russian state-media report of an Iran-US deal sent oil to session lows, while key U.S. data and Canada's tariff response rattled traders.
A late-session report from Russian state-owned media, citing Iranian and Pakistani sources, ignited speculation Tuesday that the United States and Iran may be closing in on a peace agreement — sending crude oil tumbling and briefly dragging the U.S. dollar lower. WTI crude fell $4.25 to close at $80.77, finishing at its worst levels of the day, adding to a stretch of unusual selling pressure that has persisted since the start of the week. Some traders have openly suggested rampant insider trading may be behind the persistent crude selloff.
The Russian media outlet involved is notable precisely because it has not been part of earlier conflict reporting or the wave of false leaks, which is why markets gave the unconfirmed rumor more weight than usual. U.S. Treasury Secretary Bessent had separately signaled Iran's leadership is "feeling the economic pressure," while Iran and Oman floated a proposal for a joint temporary shipping lane — adding peripheral diplomatic texture to the day's headlines.
Read more Oil Slides Over 3% as U.S. Opts for Economic Pressure on Iran →
On the data front, U.S. consumer confidence for August came in at 89.4, missing the 90.2 consensus, and new home sales for July printed at 607,000 against a 620,000 estimate. The June Case-Shiller 20-city home price index, however, beat expectations at +2.1% year-over-year versus a +1.7% forecast. The Richmond Fed manufacturing composite dipped to +4 from +5. Boston Fed President Collins reinforced a cautious tone, stating inflation remains too high.
Canada escalated trade tensions by announcing counter-tariffs covering roughly $20 billion in products, a move that rattled currency markets. The New Zealand dollar led gains among G10 currencies while the Swiss franc lagged. Equities held up relatively well — the S&P 500 gained 0.3% — with AI-linked names continuing to anchor sentiment and meme stocks outperforming in a show of speculative appetite. Gold added $14 to $4,665, maintaining a bid despite volatile intraday swings. U.S. 10-year Treasury yields fell 8.1 basis points to 4.62%.
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