US Stock Market Today: S&P 500 Rally Slows as Trump Rejects Iran Proposal and Crude Prices Climb

Wall Street opened lower on Monday as renewed US-Iran tensions lifted oil prices and slowed last week’s record-setting rally. The Dow Jones Industrial Average fell 60.1 points, or 0.12%, to 49,549.07 at the open. The S&P 500 dropped 13.6 points, or 0.18%, to 7,385.31, while the NASDAQ Composite lost 111.4 points, or 0.42%, to 26,135.633.

However, stocks later steadied as chip shares and strong earnings helped limit the early decline. Investors also turned their attention to inflation data, retail sales, corporate results, and a planned meeting between US President Donald Trump and Chinese President Xi Jinping.

Iran Deadlock Sends Oil Prices Higher

Oil prices rose after Trump rejected Iran’s latest response to a US peace proposal. He called the response ‘totally unacceptable,’ raising doubts over whether the 10-week conflict could end soon.

The dispute has kept shipping through the Strait of Hormuz under pressure. As a result, crude prices climbed, with Brent moving above $102 a barrel and West Texas Intermediate approaching $100.

Tom Essaye, founder of the Sevens Report, said markets had not priced in a deeper crisis. He said, “Markets still believe a cease-fire agreement will be reached.”

Matt Maley, chief market strategist at Miller Tabak + Co., also noted that investors had continued to look past the conflict. He said, “The geopolitical front remains extremely uncertain, but investors continue to be able to look past these issues.”

Record Rally Slows but Earnings Support Stocks

The S&P 500 and NASDAQ had closed at record highs on Friday. The rally came after strong corporate earnings, solid payrolls data, and renewed optimism around technology and semiconductor companies.

Still, Monday’s session showed caution as investors weighed higher oil prices against stronger profit growth. More than four out of five S&P 500 companies that have reported quarterly results have beaten profit estimates, according to FactSet.

Robert Edwards, chief investment officer at Edwards Asset Management, said the economy had continued to surprise investors. He said, “The worry list is long, but the economy keeps proving the bears wrong.”

He added that big technology companies had regained market leadership through solid revenue and earnings growth. That strength helped offset pressure from energy costs and geopolitical concerns.

Energy Gains While Airlines and Consumers Slip

Energy stocks led the S&P 500 sectors as oil prices moved higher. The materials sector also advanced, tracking gains in precious metals.

However, airline stocks weakened as fuel costs threatened margins. Southwest Airlines, Delta Air Lines, Alaska Airlines, and United Airlines fell between 1.8% and 2%.

Consumer-facing and travel stocks also came under pressure. Dollar General declined as investors assessed how higher gasoline prices could affect lower-income shoppers. Royal Caribbean also fell as fuel costs weighed on transport and travel names.

Mosaic dropped after the fertilizer maker withdrew its annual phosphate production forecast. The company has faced higher input costs and logistics pressure linked to the Middle East conflict.

Chip Stocks and Deal News Help Limit Losses

Chip stocks helped support the broader market. Intel rose after a strong Friday rally tied to a report about a preliminary chip-making agreement with Apple.

Qualcomm surged to a record high, while NVIDIA and Micron also gained as investors continued to back companies tied to artificial intelligence spending. The sector remained a major driver of the market’s recent advance.

Fox Corp climbed after beating Wall Street estimates for third-quarter revenue. Beazer Homes also jumped after Dream Finders Homes offered to buy the company in a deal valued at about $704 million.

Meanwhile, Wall Street strategists continued to raise year-end S&P 500 targets. CFRA lifted its target to 7,730 from 7,400, while Yardeni Research raised its forecast to 8,250 from 7,700.

Inflation Data and Trump-Xi Meeting Move Into Focus

Investors now await Tuesday’s consumer price index report. The data is expected to show whether energy prices have added pressure to inflation. Producer prices, import prices, and retail sales are also due later this week.

Treasury yields edged higher, with the 10-year yield rising to 4.39% from 4.38% late Friday. Higher yields can raise borrowing costs for households and companies.

Markets are also watching Trump’s planned meeting with Xi in Beijing later this week. The two leaders are expected to discuss Iran, Taiwan, artificial intelligence, nuclear weapons, and a possible extension of a critical minerals deal.

Earnings remain on the calendar as the season winds down. Cisco and Applied Materials are due to report this week, while NVIDIA and Walmart will report later in the month.

Despite fresh geopolitical tensions and rising oil prices, Wall Street continues to find support from strong earnings, resilient economic data, and ongoing momentum in technology and AI-driven stocks.

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