A rebound in oil drove stocks lower as traders awaited confirmation that Iran will join the US in peace talks before a ceasefire expires, with the two sides still at odds on key issues.

Equities extended losses after the New York Times reported that Vice President JD Vance’s diplomatic trip to Islamabad has been put on hold after Tehran failed to respond to American negotiating positions. Brent crude hovered near $99. Treasury yields rose alongside the dollar.

President Donald Trump said Tehran had “no choice” but to send a delegation to Pakistan. The US is “ready to go” with a resumption of bombing if a breakthrough isn’t reached, he told CNBC. Parliament Speaker Mohammad Bagher Ghalibaf said Iran would not “accept negotiations under the shadow of threats.”

The standoff threatens to deepen a global energy crunch, with flows through the vital Strait of Hormuz remaining at a virtual standstill. And that’s just one of the unresolved issues, along with the Islamic Republic’s nuclear capabilities and Israel’s military operation in Lebanon.

“Waiting in cash for the all-clear sign is never a profitable strategy, but there are plenty of risks ahead,” said Chris Zaccarelli at Northlight Asset Management. “So it also doesn’t make sense to move to a high risk-taking posture either.”

Meantime, Kevin Warsh, Trump’s nominee to lead the central bank, noted the Federal Reserve needed a new framework for dealing with persistent inflation, without offering more specifics. He also said the US president has not asked him to commit to making certain rate decisions.

“The president nominated me for the position, and I’ll be an independent actor if confirmed as chairman of the Federal Reserve,” Warsh added.

At first glance, a “Warsh Fed” looks pretty much as expected, according to Michael Brown at Pepperstone.

“In short, interest rates will again become the primary policy tool, with the balance sheet likely to take a secondary role, potentially shrinking over time too, albeit within an ‘ample reserves’ regime which may make substantial shrinkage somewhat difficult,” he said.

Traders also parsed the latest economic data. US retail sales soared by the most in a year, suggesting consumers continued to spend on a wide array of merchandise despite a surge in gasoline prices sparked by the war.