Stocks fall and oil rises after Trump says 'a whole civilization will die tonight' ahead of ceasefire deadline

• Oil rose and stocks fell on Tuesday after the latest threats against Iran from Donald Trump.
• Trump wrote "A whole civilization will die tonight" on Truth Social ahead of his ceasefire deadline.
• Markets pared more dramatic moves seen earlier in the day on reports of peace talk progress.

Markets were rattled on Tuesday by apocalyptic threats against Iran from US President Donald Trump.

The president said, "A whole civilization will die tonight" if Iran doesn't agree to a deal by his 8 p.m. ET deadline in a post on Truth Social.

Stocks pared some losses around midday as Axios reported progress had been made ahead of the deadline.

Here's where major indexes stood around 1:00 p.m. ET:

S&P 500: 6,590.39, down 0.3%

Dow Jones Industrial Average: 46,478.71, down 0.4% (-191.17 points)

Nasdaq Composite: 24,062.28, down 0.5%

WTI oil prices gained 2% to $114.50, while Brent was roughly flat at $109.50. Oil was trading higher earlier in the day.

The 10-year Treasury yield rose 2 basis points to 4.37%.

Trump said previously that "every bridge" in the country could be "decimated" and that "every power plant in Iran will be out of business, burning, exploding, and never to be used again."

Losses accelerated after the open, with losses in regular trading deepening after relatively small premarket declines.

Still, the market has been fairly resilient so far during the war. The S&P 500 and the Nasdaq 100 are down about 2% in the last month, and the moves have been smaller than what investors saw during other big events like last year's "Liberation Day" tariff announcements.

Deutsche Bank wrote on Tuesday that the tepid reaction to the ongoing war might be more rational than it appears, and that the energy crisis brought on by the war hasn't met the threshold that triggered wider economic turmoil in past shocks, such as the 1970s or 2022.

"It's worth noting that in most big oil shocks of recent decades, the selloffs were followed by a reasonably swift recovery," the bank's analysts added.

Front-month US oil futures are now trading at a premium to Brent — a rare reversal — reflecting the immediate scramble for supply. The WTI contract is for May delivery, while Brent's equivalent is for June, highlighting tighter near-term demand for US-linked barrels.

That shift underscores how quickly global trade flows are being redrawn.

Following sweeping sanctions on Russia, Europe has become the largest buyer of US crude in recent years, but it is now facing stiffer competition amid the war in Iran.

Asian economies, heavily reliant on Middle Eastern oil, are scrambling to replace disrupted supply, driving a global hunt for cargoes from the Americas to Africa.

"Asian refiners, shut out of Middle Eastern supply, are bidding aggressively for every available Atlantic Basin barrel," Paola Rodriguez-Masiu, the chief oil analyst at Rystad Energy, wrote in a note last week, adding that buyers are "desperate for additional barrels."

The global scramble is hitting US consumers, as the country remains exposed to global price swings despite being a net energy exporter.

Many US refineries are configured to process heavier imported crude, limiting how quickly they can switch to domestic supply.

The pain is most visible at the pump, where prices have soared past $4 a gallon. As of Tuesday, the average price for a gallon of gas in the US is $4.14. The most expensive state for gas, California, has seen prices hit $5.93 per gallon.

JPMorgan said on Monday that prices could soon hit $5 a gallon if the Strait of Hormuz isn't opened by the middle of this month.