NEW YORK, New York -  U.S. stocks finished mostly lower on Tuesday, while global markets delivered a mixed performance as geopolitical uncertainty surrounding a potential U.S.-Iran dialogue overshadowed trading, sending oil prices sharply higher.

The Dow Jones Industrial Average shed 84.75 points, or 0.18 percent, closing at 46,123.72.

The broader S&P 500 fell 24.62 points, or 0.37 percent, to end the session at 6,556.38.

The tech-heavy Nasdaq Composite underperformed, dropping 184.87 points, or 0.84 percent, to settle at 21,761.89.

Market sentiment was rattled by conflicting signals regarding diplomatic efforts to end the ongoing war in the region. Doubt emerged after a statement from former President Trump indicating that talks were taking place with Iran, a claim swiftly denied by Iranian officials. The contradictory reports injected a fresh wave of uncertainty into the markets, prompting a defensive posture among investors. This geopolitical unease also fueled a sharp surge in crude oil prices, adding to concerns about inflationary pressures and the potential for further disruption to global energy supplies.

Despite the losses in the headline U.S. indexes, other domestic indices posted gains. The NYSE Composite Index advanced 84.69 points, or 0.39 percent, to 21,995.46, while the NYSE American Composite Index jumped 159.38 points, or 1.88 percent, to 8,627.72. The small-cap Russell 2000 Index also rose, climbing 14.61 points, or 0.59 percent, to 2,508.83. Meanwhile, the CBOE Volatility Index, known as Wall Street's "fear gauge," rose 2.72 percent to 26.86, reflecting the uptick in investor anxiety.

European markets showed a mixed picture amid the global uncertainty. The FTSE 100 in London gained 71.01 points, or 0.72 percent, to close at 9,965.16, while France's CAC 40 added 0.23 percent to finish at 7,743.92. The pan-European EURO STOXX 50 Index edged up 0.13 percent to 5,581.29. However, Germany's DAX slipped 0.07 percent to 22,636.91. The Cboe UK 100 rose 0.63 percent to 991.28, and the Euronext 100 Index advanced 0.50 percent to 1,718.65, while Belgium's BEL 20 closed nearly flat, up just 0.10 percent at 4,944.99.

Asian markets delivered a divergent performance ahead of the U.S. session. Hong Kong's Hang Seng Index surged 2.79 percent to 25,063.71, while South Korea's KOSPI Composite Index rallied 2.74 percent to 5,553.92. Japan's Nikkei 225 also posted solid gains, climbing 1.43 percent to 52,252.28. In mainland China, the SSE Composite Index rose 1.78 percent to 3,881.28.

Elsewhere in the Asia-Pacific region, India's S&P BSE Sensex jumped 1.89 percent to 74,068.45, and Indonesia's IDX Composite added 1.20 percent to 7,106.84. Australia's S&P/ASX 200 rose 0.16 percent to 8,379.40, with the broader ALL ORDINARIES up 0.22 percent to 8,571.30. Singapore's STI Index gained 0.44 percent to 4,862.43. However, New Zealand's S&P/NZX 50 fell 1.53 percent to 12,701.75, and Malaysia's FTSE Bursa KLCI declined 0.69 percent to 1,708.76. Taiwan's TWSE Index dipped 0.34 percent to 32,612.24.

Markets in other regions also reflected the risk-off sentiment. Canada's S&P/TSX Composite Index managed a modest gain of 0.18 percent to 31,941.59. In the Middle East, Israel's TA-125 fell 1.23 percent to 4,170.43, while Egypt's EGX 30 Index declined 1.43 percent to 46,930.90. South Africa's Top 40 USD Net TRI Index was down 1.10 percent at 6,475.94.

Analysts noted that while some indices found support from regional factors, the overriding theme for global markets was the renewed geopolitical tension. The combination of denied diplomatic talks and surging oil prices left investors weighing the risks of a prolonged conflict against the prospects for stability.

U.S. Dollar Strengthens Broadly Against Major Currencies in Tuesday Trading

The U.S. dollar posted sweeping gains against its major counterparts on Tuesday, buoyed by shifting sentiment on prospects for ending the war in Iran.

The euro softened against the greenback, with the EURUSD pair trading at 1.1587, a decline of 0.21 percent. The single currency, aside from the volatile geopolitical situation, faced pressure amid ongoing concerns about the divergence in monetary policy between the European Central Bank and the Federal Reserve.

The dollar saw more pronounced gains against the Japanese yen and the Swiss franc. The USDJPY pair climbed to 158.97, adding 0.35 percent, as the yen continued to face headwinds from the oil crisis. Meanwhile, the Swiss franc retreated sharply, with USDCHF rising 0.48 percent to trade at 0.7900.

Commodity-linked currencies also struggled against the dollar. The USDCAD pair advanced 0.27 percent to reach 1.3762, supported by the dollar's broad strength despite volatile crude oil prices. The Australian and New Zealand dollars posted some of the steepest losses of the session. The AUDUSD fell 0.57 percent to 0.6970, while the NZDUSD dropped 0.63 percent to trade at 0.5820.

In contrast, the British pound showed relative resilience but still traded lower. The GBPUSD pair slipped 0.30 percent to settle at 1.3383, as traders weighed the outlook for the Bank of England's rate path against the persistent strength of the U.S. dollar.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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