DUBAI, United Arab Emirates (AP) — Iran on Tuesday denounced U.S. strikes a day earlier as a sign of “bad faith and unreliability” as negotiations continue toward a possible deal to end the war.
The U.S. military has characterized Monday's strikes in southern Iran as defensive, saying targets included missile launch sites and boats placing mines, and said the U.S. acted with “restraint" in light of the weekslong ceasefire.
Iran's foreign ministry called the strikes a ceasefire violation and warned that Washington would bear responsibility for “all consequences,” without details.
“The Islamic Republic of Iran will leave no act of aggression unanswered,” it added in a statement.
Iran’s Revolutionary Guard on Tuesday said it had shot down and deterred drones and a fighter jet that entered its airspace, according to Iran’s official Mizan news agency, which did not specify when the incident occurred.
It wasn't immediately clear what the developments would mean for negotiations. The strikes came after Iranian parliament speaker Mohammad Bagher Qalibaf went to Qatar as part of the talks, which U.S. President Donald Trump said Monday were “proceeding nicely.”
The strikes were the latest flare-up in the fragile ceasefire that began April 7 and has largely held.
Negotiations center in part on the Strait of Hormuz, the crucial waterway off southern Iran through which a fifth of the world's crude oil and natural gas passed before the war began with U.S.-Israeli strikes in February. Tehran retaliated by effectively closing the strait, stranding hundreds of ships and shocking the global economy.
The U.K. Maritime Trade Operations Center said an explosion was reported Tuesday morning aboard a tanker in the Gulf of Oman, which lies near the strait. No one was injured in the blast; there was no immediate information on the cause.
Besides disrupting energy markets, the strait's closure is also squeezing fertilizer supplies worldwide. The full impact might not become clear until harvests that are months away. U.N. Food and Agriculture Organization Director-General Qu Dongyu, warned at an event in Rome Tuesday that “the decisions we make now will determine whether this remains a manageable shock or evolves into a deeper global food security crisis in 2026 and 2027 and beyond."
The strait has become a powerful lever for Tehran in talks, joining the long-running issue of Iran's nuclear program and highly enriched uranium. Iran, in turn, wants the U.S. to lift its military blockade of Iranian ports that began on April 17.
“What we are witnessing today is not only a geopolitical crisis, it is a systemic shock to the global agrifood system,” Qu said Tuesday.
Trump has introduced a new angle in negotiations for a deal on the war, saying any agreement to end the war should include a requirement for several additional countries, including Saudi Arabia and Pakistan, to join the Abraham Accords, a series of U.S.-brokered diplomatic, economic and security agreements aimed at normalizing relations with Israel.
Bahrain and the United Arab Emirates became the first countries to join in 2020; Sudan, Morocco and Kazakhstan have followed. Egypt and Jordan already formally recognize Israel and have long-standing peace treaties. Turkey first recognized Israel in 1949.
Israel’s conduct against Palestinians, including in the war against Hamas in the Gaza Strip, has alienated Gulf Arab states and the wider Muslim world, but Trump has been keen to build on the Abraham Accords, forged during his first term. He has even suggested that Iran eventually could sign on.
President Donald Trump speaks during the 158th National Memorial Day Observance coinciding with the nation's 250th anniversary, at the Memorial Amphitheater in Arlington National Cemetery, Monday, May 25, 2026, in Arlington, Va. (AP Photo/Alex Brandon)
NEW YORK (AP) — The U.S. stock market is rising Tuesday as it catches up with others around the world that climbed the day before, when President Donald Trump said negotiations were “proceeding nicely” with Iran on ending their war.
The S&P 500 rose 0.5% after trading resumed following Monday’s holiday. The Dow Jones Industrial Average was up 53 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.8% higher. All three are near their all-time highs.
The gains came even though fighting continued in the region, and the U.S. military said it carried out “self-defense” strikes in southern Iran, including on missile launch sites and boats placing mines. Markets have rallied in the past on hopes for a coming end to the war with Iran, only to see the conflict drag on.
The price for a barrel of Brent crude, the international standard, rose 3% to $96.25, but that reclaimed only a bit of its 7.1% plunge from Monday. The price for a barrel of U.S crude oil, meanwhile, fell 3.8% to $92.99 after resuming trading following the Memorial Day holiday.
Oil prices have been at the center of the action for financial markets since the United States and Israel attacked Iran in late February. The ensuing war has closed the Strait of Hormuz to most oil tankers, keeping crude pent up in the Persian Gulf instead of flowing to customers worldwide. That in turn has driven up oil’s price and sent a wave of painful inflation around the world.
Hopes for a deal to end the war helped lift stocks of companies with big fuel bills. United Airlines rose 4.5%, and cruise operator Carnival steamed 3.7% higher.
The lower oil prices also helped pull yields lower in the U.S. bond market, which eased the pressure on all kinds of investments. The yield on the 10-year Treasury fell 4.48% from 4.56% late Friday.
It’s a respite following gains for yields in bond markets worldwide recently, which threatened to slow economies and undercut prices for stocks and all kinds of other investments. High yields have already forced the average long-term U.S. mortgage rate to its most expensive level since last summer, and they could curtail companies’ borrowing to build the AI data centers that have supported the U.S. economy’s growth recently.
Big technology stocks also continued their big runs, driven by hopes for continued profits because of the boom around artificial-intelligence technology. Micron Technology jumped 11.2% and was the strongest force lifting the S&P 500 after analysts at UBS led by Timothy Arcuri raised their 12-month price target for the stock to $1,625 from $535.
That helped offset a drop of 8.2% for AutoZone, which reported slightly weaker revenue for the latest quarter than analysts expected, though its profit topped expectations. CEO Phil Daniele said performance for the retailer’s stores in Brazil and Mexico was below its plan.
Most big U.S. companies have been reporting both profit and revenue for the start of 2026 above what analysts expected. The strong performances have helped vault U.S. stocks to records, even with all the uncertainty around oil prices and the war with Iran.
In stock markets abroad, indexes were mixed. South Korea’s Kospi jumped 2.5% as it also caught up with other markets following a Monday closure for a holiday.
London’s FTSE 100 added 0.7% even though British petroleum giant BP fell 4.7% there. It ousted its chairman over what it called serious concerns related to “important governance standards, oversight and conduct.”
Japan’s Nikkei 225 fell 0.2% and fell back from its all-time high set the day before.
AP Business Writer Elaine Kurtenbach contributed to this report.
Specialist Glenn Carell, left, and trader Robert Charmak work on the floor of the New York Stock Exchange, Friday, May 22, 2026. (AP Photo/Richard Drew)
People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 25, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, left, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Wednesday, May 20, 2026. (AP Photo/Ahn Young-joon)
A person looks at an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 25, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
A person stands in front of an electronic stock board showing Japan's Nikkei index, seen through the glass wall of an office building Monday, May 25, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
