Global oil prices climbed on Monday as tensions between the United States and Iran intensified, though the gains were more moderate than earlier in the conflict. Meanwhile, U.S. stocks edged lower, pulling back slightly from recent record highs.
The S&P 500 slipped 0.2% from its all-time peak, marking only its second decline in 14 days. The drop followed the United States’ seizure of an Iranian-flagged cargo vessel accused of attempting to evade its blockade of Iranian ports. The Dow Jones Industrial Average fell by 4 points, or less than 0.1%, while the Nasdaq composite declined 0.3%.
Brent crude oil, the international benchmark, rose 5.6% to settle at $95.48 per barrel. The increase was driven by concerns that Iran could restrict petroleum flows in the Persian Gulf by continuing to block tankers from exiting the Strait of Hormuz.
The shift contrasts with the previous trading session, when stocks surged and oil prices fell after Iran announced it would reopen the strait to commercial traffic. However, optimism quickly faded after Iran shut the route again on Saturday in response to the U.S. decision to proceed with its blockade.
Attention is now turning to a key deadline: a ceasefire agreement between the United States and Iran is set to expire at 8 p.m. Eastern Time on Tuesday, which corresponds to early Wednesday in Tehran.
Despite the latest increase, oil prices remain below their peak during the conflict, when Brent crude briefly exceeded $119 per barrel. The S&P 500 also remains above its pre-war level.
Monday’s relatively subdued market movements suggest that investors still anticipate a potential agreement between Washington and Tehran that could restore oil flows from the Middle East. Such an outcome would serve the economic interests of both countries.
Companies with high fuel costs were among the biggest losers on Wall Street as crude prices rose. Norwegian Cruise Line Holdings dropped 3.5%, while Royal Caribbean Group declined 1.1%.
Airline stocks also weakened. United Airlines fell 2.8%, and American Airlines dropped 4.2% after announcing it was not interested in a merger with United. Airline shares had rallied the previous week amid reports of a possible combination.
On the positive side, TopBuild surged 19.4% after QXO announced plans to acquire the insulation and building products distributor in a deal valued at approximately $17 billion. QXO’s shares, however, fell 3.1% following the announcement.
Overall, the S&P 500 declined by 16.92 points to close at 7,109.14. The Dow Jones Industrial Average slipped 4.87 points to 49,442.56, and the Nasdaq composite dropped 64.09 points to 24,404.39.
A key driver behind the U.S. stock market’s recent strength has been robust corporate earnings for the first quarter of 2026, along with expectations of continued growth. Several major banks reported stronger-than-expected profits and expressed confidence in the resilience of the U.S. economy, supported by steady consumer spending.
Morgan Stanley strategists, led by Michael Wilson, noted that the earnings recovery remains intact despite geopolitical risks. Analysts have even raised their profit forecasts for spring 2026 since the conflict began.
So far, about 10% of S&P 500 companies have reported their quarterly results, with nearly 90% exceeding analysts’ expectations, according to FactSet. If current projections hold, overall earnings per share for the index are expected to rise by 13% compared to a year earlier.
Upcoming earnings reports this week include UnitedHealth Group on Tuesday, Tesla on Wednesday, and Procter & Gamble on Friday.
In international markets, European indexes declined while Asian markets closed higher. Germany’s DAX fell 1.2%, while Hong Kong’s Hang Seng index gained 0.8%.
Source: AP
