The S&P 500 (-0.4%), Nasdaq Composite (-0.8%), and DJIA (-0.2%) finished lower as investors weighed geopolitical developments, rising yields, and a rebound in oil prices. Despite solid participation across the broader market that helped the major averages recover much of their early losses, weakness in mega-cap names prevented a sustained move above flatline levels.

Today's developments in the Middle East offered little clarity on how close an off-ramp to the Iran conflict may be. Early headlines focused on Iran's continued denial of involvement in ceasefire negotiations with the U.S., alongside reports of neighboring Gulf states supporting stricter measures against Tehran. However, Axios reported that the U.S. has at least made contact with Iran through mediators and is awaiting a response on peace talks. President Trump also reiterated to reporters that both the U.S. and Iran are eager to strike a deal. 

Oil rebounded amid the ongoing uncertainty after retreating 10% in yesterday's session, settling today's session $4.10 higher (+4.7%) at $92.29 per barrel. The energy sector (+2.1%) finished as the top-performing S&P 500 sector. 

After recovering from relatively broad opening losses, the market ultimately finished mixed despite leaning higher for most of the session. 

The materials sector (+1.7%) was another outperformer, with chemical names leading the advance. Fertilizer names such as CF Industries (CF 126.92, +6.74, +5.61%) and Mosaic (MOS 25.22, +1.14, +4.73%) were among some of the top performers as hostilities near the Strait of Hormuz continue to drive volatility. 

Elsewhere, the utilities sector (+0.7%) also posted a nice gain. Other defensive sectors, such as the consumer staples sector (+0.1%), sported gains wider than 1.0% today, though they ceded most of their strength in the afternoon. Estee Lauder (EL 71.47, -7.82, -9.86%) was one of the worst-performing S&P 500 names after the company confirmed it is in discussions about a potential business combination with Spain's Puig. 

Meanwhile, the communication services sector (-2.5%) was a laggard for the entirety of today's session. It was a tough session for mega-cap stocks, and Alphabet (GOOG 289.20, -9.82, -3.28%) bore the brunt of the weakness, with Meta Platforms (META 592.92, -11.14, -1.84%) also finishing lower. 

The Vanguard Mega Cap Growth ETF finished 1.3% lower, which contributed to the underperformance of the market-weighted S&P 500 (-0.4%) relative to the S&P 500 Equal Weighted Index (+0.1%). 

Microsoft (MSFT 372.74, -10.26, -2.68%) was another "Magnificent Seven" laggard as software names came under renewed pressure today. The iShares GS Software ETF shed 4.2%, and the broader information technology sector finished 0.7% lower. 

Losses were somewhat pared by a 1.3% gain in the PHLX Semiconductor Index and strong performances across hardware and electrical component manufacturers such as Lumentum (LITE 801.99, +73.04, +10.02%), Corning (GLW 142.09, +11.12, +8.49%), and Dell (DELL 176.98, +12.39, +7.53%). 

Outside of the S&P 500, the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.8%) outperformed the major averages.

Overall, the market showed some resilience despite higher oil prices and ongoing geopolitical uncertainty, with strength outside mega-cap tech helping to offset losses. Still, the major averages remain capped below their 200-day moving averages, reflecting a cautious tone as the Iran situation continues to evolve.

U.S. Treasuries gave back Monday's gains during a Tuesday reversal that also produced fresh 2026 intraday highs for yields across all tenors. The U.S. Treasury started this week's note auction slate with a poor 2-year note offering that tailed by nearly two basis points. The 2-year note yield settled up 10 basis points to 3.93% and the 10-year note yield settled up six basis points to 4.39%. 

• S&P Mid Cap 400: +2.4% YTD
• Russell 2000: +1.0% YTD 
• DJIA: -4.0% YTD
• S&P 500: -4.2% YTD 
• Nasdaq Composite: -6.4% YTD

Reviewing today's data:

• Q4 Productivity - Revised 1.8% (Briefing.com consensus 2.5%); Prior revised to 4.9% from 2.8%, Q4 Unit Labor Costs - Revised 4.4% (Briefing.com consensus 3.1%); Prior revised to -1.9%% from 2.8%
  • The key takeaway from the report is the dichotomy of lower productivity and higher unit labor costs, the latter of which will contribute to the Fed's reticence to cut rates soon (even though this is a dated report).
• March S&P Global U.S. Manufacturing PMI - Prelim 52.4; Prior 51.6
• March S&P Global U.S. Services PMI - Prelim 51.1; Prior 51.7