LIVE MARKETS-Wall Street on the defensive again as cautious tone persists

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WALL STREET ON THE DEFENSIVE AGAIN AS CAUTIOUS TONE PERSISTS

U.S. stocks are on the defensive again early Thursday, giving back some ground after Wednesday's rally, with investors digesting another round of mixed signals out of the Middle East.

Markets are left parsing dueling narratives from Washington and Tehran. President Donald Trump says Iran is desperate to cut a deal to end the fighting, while Iran's foreign minister strikes a very different tone, saying Tehran is reviewing a U.S. proposal but has no plans for talks aimed at winding down the conflict.

That disconnect is keeping nerves frayed, especially with no clear path yet to restoring shipping through the Strait of Hormuz — a potential flashpoint for oil prices and global trade.

"The latest reports around a potential ceasefire leave investors confused," writes Tom Lee, head of research at Fundstrat.

"Conflicting statements by Iran's leadership not only highlight the fracturing of the Iran regime but also highlights the 'fog of war' underway. And this 'fog' is a reason many investors remain wary and sidelined."

The cautious tone follows a strong close Wednesday, when stocks climbed after the U.S. delivered a proposal to Iran through Pakistan. Iranian officials had hinted, at least privately, that diplomacy wasn't totally off the table — even as public statements denied any negotiations.

The stakes remain high. The OECD warned Thursday that the intensifying conflict has already knocked the global economy off a more robust growth track, and any closure of the Strait of Hormuz could send inflation sharply higher.

Here's an early snapshot of where assets across financial markets are trading as of 10:30 a.m. EDT:

(Gertrude Chavez-Dreyfuss)

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