Oil drops, stocks hit records on hopes of Hormuz opening

LONDON — Oil prices fell sharply Tuesday after U.S. Treasury Secretary Scott Bessent said a deal could be reached with Tehran by Wednesday on re-opening the Strait of Hormuz to shipping traffic. The renewed optimism after five months of blockage for Gulf oil and gas tankers bolstered stocks, with Wall Street building on recent advances after the Dow hit a record closing high Monday, with the S&P 500 on track to do the same on Tuesday. In Europe, the benchmark indexes in Paris and Milan closed at all-time highs, while both Frankfurt and Madrid extended records reached on Monday. The gains came after last week's tech-led rollercoaster ride, spurred by renewed worries about massive AI spending and how quickly those investments will start generating wider economic payoffs. A series of forecast-busting U.S. corporate earnings — most recently by AI-data mining giant Palantir as well as construction behemoth Caterpillar — was also bolstering confidence that firms would weather the volatility sparked by the U.S. and Israeli strikes on Iran. Yet investors remained wary about the prospects fo