Wall Street’s main indices retreated on Monday, giving up some of last week’s strong gains as renewed tensions between the United States and Iran dampened investor sentiment and raised concerns over the fragile ceasefire.
Iran is considering attending peace talks with the US in Pakistan, a senior Iranian official told Reuters, following efforts by Islamabad to end a US blockade of Iran’s ports. However, a source said Vice President JD Vance remained in the US, denying reports that he was en route to Pakistan for negotiations.
The Strait of Hormuz, reopened by Iran on Friday and a key driver behind last week’s rally, was shut again over the weekend, adding to market uncertainty.
The previous surge had pushed the S&P 500 and the Nasdaq to record highs for a third consecutive session, marking their strongest weekly gains since May.
At 11:41 AM ET, the Dow Jones Industrial Average fell 58.18 points, or 0.12 per cent, to 49,389.25. The S&P 500 declined 23.56 points, or 0.33 per cent, to 7,102.50, while the Nasdaq Composite dropped 134.89 points, or 0.55 per cent, to 24,333.59.
Oil prices rose 5 per cent on Monday, supporting the energy sector on the benchmark S&P 500, which advanced 0.9 per cent.
“The market is looking through what they're seeing in the Middle East conflict. Part of that is because you get a headline one day, you get another the next day,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
Technology stocks were the biggest drag on the S&P 500, with chipmakers leading the decline. The Philadelphia SE Semiconductor index slipped 0.2 per cent.
The consumer discretionary and communication services sectors were the worst performers, weighed down by declines of about 1.6 per cent in Amazon and 2 per cent in Meta Platforms, respectively.
Meta is on track to snap a nine-session winning streak, its longest since October, while Amazon was among the biggest drags on the Dow.
Marvell Technology rose 4 per cent after a report said Alphabet’s Google was in talks with the chipmaker to develop two new chips to run AI models more efficiently.
The CBOE Volatility Index, often referred to as Wall Street’s “fear gauge”, climbed 1.93 points to 19.42, marking a one-week high after declining for eight straight sessions.
“It's not surprising to see a small pullback today, but with some of the tailwinds that have been in the market... and the technicals that we're seeing, the market is thinking things are in a pretty good place,” Fernandez added, noting that attention has now shifted to quarterly earnings.
Investors are assessing the potential impact of the Iran conflict on corporate results and the broader economy, with companies such as Lockheed Martin and IBM set to report later this week.
Tesla is scheduled to kick off earnings for the “Magnificent Seven” on Wednesday.
Shares of QXO fell 7.3 per cent after the construction supplies distributor announced a $17 billion deal to acquire building products distributor and installer TopBuild, whose shares surged 16.5 per cent.
Advancing stocks outnumbered decliners by a 1.05-to-1 ratio on the NYSE and by a 1.02-to-1 ratio on the Nasdaq.
The S&P 500 recorded 39 new 52-week highs and no new lows, while the Nasdaq Composite logged 143 new highs and 29 new lows.
