NEW YORK (AP) — Oil prices are sinking again and dipped below $80 per barrel for the first time since early March, while the U.S. stock market drifts near its all-time high. The S&P 500 edged up 0.1% early Tuesday following a rally that's brought it close to the record it set earlier this month. The Dow Jones Industrial Average rose 368 points, and the Nasdaq composite slipped 0.1%. Brent crude fell 3% as optimism continues following the tentative deal reached between the United States and Iran that will hopefully reopen the Strait of Hormuz at the end of the week.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.
U.S. markets leaned toward modest gains before the opening bell Tuesday and oil prices fell following the U.S. and Iran's announcement a day earlier that they had a reached a tentative deal to end their conflict.
Futures for the S&P 500 and Dow Jones Industrial Average each edged 0.1% higher. Nasdaq futures were up 0.3%.
Brent crude fell nearly 3% on expectations that the U.S.-Iran agreement might reopen the Strait of Hormuz, where much of Asia gets its oil supply. But some analysts have urged caution, noting many issues remain uncertain.
Iran's top diplomat said Tuesday that the tentative deal to end the war would require Israel to withdraw from Lebanon — a condition Israel has already rejected and that could sink the agreement.
The deal between the U.S. and Iran has not been made public and officials have sometimes offered contradictory interpretations of what is in it. While Israel is not party to the agreement, it is part of the war.
Negotiations with Iran are expected to continue over the next 60 days. Even after Hormuz reopens on Friday as expected, it will likely take months for the energy industry to get back to full speed.
Oil prices have declined recently on hopes for an extension of the ceasefire in the war, falling from the $100 plus levels they were at a few weeks ago. Before the war, oil was trading at about $70 a barrel.
Early Tuesday, benchmark U.S. crude was down $2.35 at $78.40 a barrel. Brent crude, the international standard, declined $2.37 to $80.80 a barrel.
In equities trading, the energy sector continued to limp as oil prices fell, but the declines were muted compared to Monday when oil lost nearly 5%. Airlines and other travel-related companies that use a lot fuel inched up modestly. Chip companies continued their rebound after swinging wildly the past few weeks.
SpaceX was on track for a third straight gain since its Wall Street debut on Friday. SpaceX said Tuesday that it is moving forward with its $60 billion acquisition of artificial intelligence startup Cursor. Elon Musk's space exploration and AI company said in a regulatory filing that Cursor will become a wholly owned subsidiary when the deal closes in the third quarter.
Robinhood Markets rose nearly 2% after the mobile stock trading platform announced in a regulatory filing that it was laying off about 10% of its workforce.
Dave & Buster's tumbled more than 15% after the restaurant and family entertainment company badly missed Wall Street's first-quarter profit targets. The company, in the midst of a turnaround strategy, said that higher gas prices, geopolitical uncertainty and weakening consumer sentiment contributed to the headwinds in April.
In Asia, Japan's benchmark Nikkei 225 briefly topped 70,000 for the first time Tuesday before trimming early gains after the Bank of Japan raised its key interest rate to 1%.
The quarter percentage point hike took the benchmark rate to its highest level in three decades.
Japan's Nikkei 225 rose 0.1% to finish at 69,404.50, while South Korea's Kospi moved further into record territory, gaining 2.1% to 8,726.60.
In Hong Kong, the Hang Seng slipped 1.4% to 24,493.95, while the Shanghai Composite fell 0.1% to 4,091.89.
Australia's S&P/ASX 200 was little changed, rising less than 0.1% to 8,917.70.
Taiwan's Taiex surged 0.9%, while India's Sensex picked up 0.7%.
France's CAC 40 jumped 0.7% at midday, while the German DAX added 0.5% and Britain's FTSE 100 surged 0.6%.
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