The S&P 500 ended down 0.21% after spending much of the session in the green, the result of a false Energy Department claim that briefly sent oil into a 17% freefall and handed equities a 1% gain they couldn't hold. The Nasdaq Composite closed barely positive, the Dow shed 34 points, and the Russell 2000 lost 0.22%. The session's only clean winner was gold, which rose 2.4% as geopolitical uncertainty kept haven demand intact even as crude collapsed. The Fed decides on rates tomorrow, with February CPI landing at 8:30 AM the same morning.

What moved it

Energy Secretary Chris Wright posted on social media that the U.S. Navy had successfully escorted a tanker through the Strait of Hormuz — a claim that, if true, would have signaled the chokepoint was reopening. ^[1] WTI crude fell more than 17% in minutes. The S&P 500 surged to nearly 1% above the prior close. Then the White House clarified that no escort had occurred and that Wright's post was an error. Oil partially recovered. The equity rally unwound. WTI settled at $83.45, down 11.9% on the session.^[4]

The broader conflict signal ran in the opposite direction. Defense Secretary Pete Hegseth called Tuesday "our most intense day of strikes inside Iran," and Tehran warned it would block oil exports from the region until attacks ceased. ^[2] The IEA convened an emergency meeting to discuss a coordinated release from strategic petroleum reserves, which IEA members hold at over 1.2 billion barrels. ^[3] President Trump separately threatened to strike Iran "twenty times harder" if it moved to close Hormuz, while also announcing that sanctions on some oil-producing nations would be eased to offset supply disruptions. WTI had traded as high as $120 on Monday before this week's signals knocked it lower — at $83.45, it remains roughly 30% above pre-conflict levels. ^[11]

The 10-year yield held flat at 4.15%, as a modest inflation reprieve from lower oil was offset by continued geopolitical risk. ^[9] Gold's 2.4% rise to $5,211 — decoupling from the oil move — reflected that the conflict's safe-haven premium remains intact regardless of intraday crude noise. ^[10]

Sector scoreboard

Energy was the session's clear laggard. The SPDR Energy ETF (XLE), which had been the year-to-date outperformer through last week, took the sharpest hit on crude's 11.9% collapse — a sharp reversal for a sector that benefited most from the initial oil spike. ^[8]

Technology and semiconductors were the offsetting strength. Taiwan Semiconductor reported combined revenue for the first two months of 2026 up approximately 30% year-over-year, confirming sustained high-end AI chip demand. Deutsche Bank upgraded software stocks to overweight, calling the recent AI-disruption selloff a buying opportunity and raising its broader tech rating to neutral. Airlines continued to underperform on fuel cost exposure and booking uncertainty, with analysts noting the sector remains structurally squeezed at $80+ crude. Defense was mixed: Lockheed Martin fell 1.9% as diplomatic signals created noise around the conflict's duration, even as the broader sector holds gains of 2–4% since the war began.

Movers

Intel and Micron led semiconductors, rising more than 5% and 3.5%, respectively, on the TSMC revenue data. The numbers provided the session's clearest bottom-up evidence that AI hardware demand has not softened. ^[7]

Nvidia added 1.16% to close at $184.77 ahead of its GTC 2026 conference, where the company is expected to detail an expanded enterprise AI software platform. The stock has been running its own catalyst-driven calendar while broader tech churned. ^[7]

After the bell

Oracle (ORCL) reported fiscal Q3 2026 results after the close and beat across the board: ^[5]

• Revenue: $17.19B vs. $16.92B estimate (+22% year-over-year)
• Adjusted EPS: $1.79 vs. $1.70 estimate
• Cloud revenue: $8.9B, +44% year-over-year; cloud infrastructure $4.9B vs. $4.74B estimate
• AI infrastructure revenue: +243% year-over-year
• After-hours: Stock up ~9% after closing the regular session at $151.56 (-1.4%)

Management raised its fiscal 2027 outlook and announced a $50B financing program for cloud infrastructure expansion, $30B of which was already raised through an oversubscribed bond and preferred stock offering. The company called the quarter the first in over 15 years to deliver 20%+ growth in both total revenue and non-GAAP EPS. ^[6]

What to watch

February CPI (Wednesday, 8:30 AM ET): The first major inflation print since oil spiked to $120. Energy's weighting in February's basket carries upside risk. January came in at +2.4% year-over-year.

Fed decision (Wednesday, 2:00 PM ET): A hold is priced at near-certainty. The dot plot and Powell's press conference are the live variables — specifically, whether the Fed validates or challenges the market's current pricing of one 25 bps cut in 2026.

Iran conflict developments overnight: The credibility of Trump's de-escalation signals versus Hegseth's "most intense day" framing hasn't resolved. Any Hormuz shipping movement — or lack of it — sets the overnight oil tone.

Oil direction: At $83.45, WTI has given back 30% from Monday's high but remains elevated. A further retreat confirms the de-escalation trade; a reversal reopens the energy inflation thesis heading into the CPI print.

Oracle open (Thursday): The ~9% after-hours move will get a proper test at Thursday's open. At $151 regular-session close, the stock is still down 23% year-to-date — the earnings beat narrows the gap between price and the AI infrastructure thesis, but doesn't close it.