U.S.-Iran Tensions Weigh Down S&P 500 and Nasdaq Markets

Wall Street cooled on Monday after a strong rally last week. Renewed U.S.-Iran tensions weighed on investor sentiment and trimmed gains.

Geopolitical developments and the Strait of Hormuz

Iran briefly reopened the Strait of Hormuz on Friday. That move helped lift markets and sent the S&P 500 and Nasdaq to record highs.

Tehran later closed the waterway again. The reversal followed a U.S. seizure of an Iranian cargo ship that tried to breach a blockade.

Kpler senior analyst Alexis Ellender has been monitoring activity in the strait. Iran’s foreign ministry said no second round of talks with the U.S. was planned.

Market snapshot

At 10:05 a.m. ET, the Dow Jones Industrial Average rose 11.67 points, or 0.01%, to 49,459.10. The S&P 500 fell 7.29 points, or 0.10%, to 7,118.77. The Nasdaq Composite lost 59.97 points, or 0.24%, to 24,408.51.

U.S.-Iran tensions helped weigh on the S&P 500 and Nasdaq markets. Still, the indexes had logged their biggest weekly gains since May.

Sector moves and volatility

Oil jumped about 5% on Monday. That lifted the energy sector, which added roughly 0.9% to the S&P 500 benchmark.

The CBOE Volatility Index rose 1.50 points to 18.98. The index hit a one-week high after an eight-session decline.

Stock winners and losers

• Goldman Sachs and JPMorgan Chase helped support the Dow.
• Amazon and Meta fell about 1.5% each, dragging consumer discretionary and communication services lower.
• Apple gained 1.4%, partially offsetting tech weakness.
• Marvell Technology climbed 4.4% after reports that Google discussed new AI chips with the company.

Notable corporate moves

QXO shares dropped 7.2% after announcing a $17 billion acquisition. The deal targets TopBuild, whose stock surged 16.8% on the news.

Breadth, earnings and outlook

Decliners outnumbered advancers by about 1.05-to-1 on the NYSE. On the Nasdaq, the ratio was roughly 1.13-to-1.

The S&P 500 registered 28 new 52-week highs and no new lows. The Nasdaq logged 103 new highs and 24 new lows.

Quarterly results will be a focus this week. Lockheed Martin and IBM are due to report later. Tesla will begin reporting for the “Magnificent Seven” on Wednesday.

Data from LSEG I/B/E/S show expected first-quarter earnings growth of 14.4% for S&P 500 firms. That compares with 13.7% a year earlier.

Analysts’ view

Some experts describe recent diplomatic moves as uneven. They say both sides may be jockeying for leverage ahead of talks.

Market participants will watch whether progress toward a lasting ceasefire emerges. The path appears to be uneven, analysts add.

Reporting by Purvi Agarwal and Avinash P in Bengaluru for Filmogaz.com.