Stocks Fall on Fading Peace Optimism, Energy Costs Climb

US stocks closed lower on Tuesday as optimism about a potential deal to stabilize the Middle East began to fade. The Strait of Hormuz will remain closed, according to Iran's newly appointed secretary of its Supreme National Security Council, until the US changes its behavior and meets Iran's conditions.

The closure has pushed Brent crude futures near one-week highs in choppy trading, while the S&P 500 energy sector index climbed 1.1%. Ross Mayfield, investment strategy analyst at Baird, said 'it's just really hard to come to an agreement that works for everyone.'

Amazon and Alphabet dipped 2.1% and 3.8%, respectively, weighing on the S&P 500 and Nasdaq. SpaceX declined almost 4%. However, alternative asset managers rose, with Apollo Global up 6.2% and Blackstone rallying almost 4%.