Here is what moved, what is on the table, and where investors should look next.
Oil jumps on talk doubts
Brent crude climbed to $98.48 a barrel on Tuesday, a 3% gain. US crude rose nearly 3% to $92.13.
The move came after Vice President JD Vance did not depart for Pakistan as expected. Iran had not replied to the latest US positions. Traders took that as a signal the talks could fail.
Trump says no extension
President Trump told CNBC he is not interested in extending the truce. The ceasefire runs out Wednesday evening Eastern time.
He said he still expects a deal, but he is ready to resume strikes if no agreement is reached. Markets are now pricing both outcomes.
Hormuz stays near-frozen
Shipping traffic through the Strait of Hormuz remains mostly halted. Only three ships passed in the last 24 hours.
The strait normally carries about 20% of the world's oil and liquefied natural gas. When it stalls, crude moves fast.
Al Jazeera also reported Iran's Revolutionary Guard seized two vessels in the strait this week. That adds fresh risk on top of the ceasefire deadline.
Stocks and defense names
US stocks gave back ground Tuesday as oil rose. Higher oil tends to cool rate-cut hopes and pressure broad indexes.
Defense names have run hard this cycle. The iShares US Aerospace and Defense ETF (ticker: ITA) is up about 8% in 2026 after a strong 2025. A hot war resuming would likely push defense higher and airlines lower.
What to watch next
Three things will set the tone over the next 48 hours.
First, whether a US delegation actually lands in Islamabad and whether Iran shows up. Second, the language out of Washington after the deadline passes. Third, shipping data from the Strait of Hormuz.
The takeaway
The setup is binary. If talks restart and the ceasefire holds, oil likely eases and risk assets bounce.
If talks collapse and strikes resume, expect another leg higher in crude and another round of pressure on stocks tied to fuel costs. Position for both outcomes, not just one.
