Investors are closely watching President Trump's conflicting signals about ending military strikes on Iran, with oil prices dropping to around $91 per barrel after Monday's volatility. The question of whether U.S. foreign policy is now influenced by S&P 500 performance has emerged as markets react to the administration's stance on the conflict.

Brent crude spiked to nearly $120 on Monday before falling sharply, while Asian and European stocks rallied despite continuing strikes. Businesses across sectors including airlines, banks, and automakers are bracing for further economic fallout. The Strait of Hormuz remains essentially paralyzed, with Iraq, Kuwait, Saudi Arabia, and the UAE cutting output by up to 6.7 million barrels daily.

Administration officials have proposed a $20 billion government-backed insurance plan for vessels and possible naval escorts to secure passage through the strait. However, analysts warn that triple-digit oil prices could return if these measures fail. The war's unpopularity with voters and potential inflation from energy price spikes could pressure Trump to de-escalate, potentially delaying Federal Reserve interest rate cuts and undermining Republican messaging on affordability.