US stocks closed higher on Tuesday, March 17, 2026, as investors navigated a complex landscape of surging oil prices, escalating Middle East tensions, and the commencement of the Federal Reserve's two-day policy meeting. The S&P 500 rose 0.25% to 6,716.09, the Nasdaq Composite gained 0.47% to 22,479.53, and the Dow Jones Industrial Average added 46.85 points to finish at 46,993.26.
Geopolitical risks, particularly the conflict involving Iran, were a primary driver of market sentiment and energy price volatility. Brent crude oil surged around 3% to trade above $103 per barrel, fueled by fears that a sustained closure of the Strait of Hormuz could severely disrupt global energy supplies. Comments from former President Donald Trump regarding military actions in Iran added to the uncertainty, causing stocks to ease from session highs.
Despite the spike in oil prices, several sectors posted gains. The S&P 500 consumer discretionary sector rose about 1%, led by travel companies like Expedia and Booking Holdings. Airline stocks, including Delta and American Airlines, rebounded strongly after raising revenue guidance. Energy stocks led sector gains, rising just over 1% for the day.
All eyes then turned to the Federal Reserve's policy decision. As widely expected, the Fed concluded its meeting on March 18 by leaving interest rates unchanged in the 3.5% to 3.75% range. The ongoing Iran conflict and its inflationary impact from higher energy costs have complicated the policy outlook, causing market expectations for rate cuts to shift. While economists still anticipate a potential cut in June, the timeline has become less certain.
On Wednesday, oil prices edged lower after industry data showed a surprise build in US crude inventories, with Brent falling to $102.27. This provided some relief, contributing to gains in Asian stock markets as investors refocused on the Fed's stance. The calmer mood followed a volatile period where crude prices had surged on fears of supply disruptions.
