US stocks pared losses Tuesday after President Donald Trump pledged American action to secure the Strait of Hormuz shipping lanes during the Iran war. The S&P 500 had dropped as much as 2.5% earlier but closed down less than 1% after Trump's assurances. The equity benchmark's recovery came as oil prices retreated from earlier gains.

Oil prices had surged over 9% earlier in the session amid fears of supply disruptions through the world's most-critical energy chokepoint. Brent crude traded near $80 a barrel in post-settlement trading as markets reacted to Trump's promise to escort and insure tankers through the Strait of Hormuz. The reversal in both equities and oil markets highlighted the impact of geopolitical tensions on global financial markets.

Don Calcagni, Chief Investment Officer at Mercer Advisors, discussed the volatile market backdrop at the Bloomberg Invest conference in New York City. Calcagni joined Bloomberg Businessweek Daily to address investment strategy during periods of heightened uncertainty. The market's reaction to Trump's comments underscores how quickly sentiment can shift when geopolitical risks appear to be mitigated.