U.S. stocks finished Monday's session with mixed performance. The Dow Jones Industrial Average declined more than 200 points, while the S&P 500 index was essentially unchanged. Gains among chipmakers provided a lift to the Nasdaq Composite and the S&P 500. Oil prices retreated after Iran signaled openness to negotiations.
The Dow fell by 207.68 points, or 0.40%, closing at 51,938.74. The S&P 500 gained 6.14 points, or 0.08%, to finish at 7,463.83. The Nasdaq Composite advanced by 89.521 points, or 0.35%, ending at 25,609.764.
Investor sentiment improved after Iran's foreign ministry spokesperson, Esmail Baghaei, offered hope for a diplomatic resolution. This followed a ninth consecutive night of U.S. strikes against Iran. Baghaei told reporters that intermediaries continued to exchange messages with Iran during the latest round of U.S. strikes and that negotiations between the adversaries could proceed based on national interests.
Oil prices reversed sharply lower on Monday, erasing earlier strong gains. Reports of a proposed 10-day ceasefire between the U.S. and Iran triggered a steep sell-off in energy prices, despite a new round of airstrikes in the Middle East over the weekend.
Earlier in the session, oil had climbed to a one-month high as the exchange of fire between the U.S. and Iran further disrupted the anticipated recovery of crude supplies. The market had widely expected a gradual supply restoration following a memorandum of understanding reached last month.
After giving up its gains, oil extended its decline. According to an Iranian source, a proposal for a 10-day ceasefire was put forward to facilitate a return to the provisional peace agreement reached last month.
Based on FactSet data, the global benchmark, September Brent crude, fell 1.6% to $86.67 per barrel. It had earlier surged as much as 3.8% to an intraday high of $91.42.
Nevertheless, Brent crude remains more than $16 above the lows touched in June when the U.S. and Iran signed the memorandum of understanding aimed at reopening the Strait of Hormuz.
The August West Texas Intermediate contract also saw a sharp reversal lower. The U.S. benchmark was last down 2.2% at just under $80 per barrel, after having climbed to a high of $86.40.
Daniela Hathorn, a senior market analyst at Capital.com, stated, "Traders trimmed some of the geopolitical risk premium that had been built into prices recently. While the conflict is far from resolved, the prospect of renewed talks has eased immediate market concerns about further disruptions to oil supply and shipping through the Strait of Hormuz."
This followed the U.S. military's announcement on Sunday night of a ninth consecutive night of airstrikes, stating they would "continue to degrade Iran's military capabilities used to attack commercial vessels and civilian mariners in the Strait of Hormuz."
Stephen Innes, managing partner at SPI Asset Management, suggested the modest pullback in oil "does not signal the market letting its guard down," but rather that "investors still view this conflict as within their cognitive map and something they believe they can compartmentalize."
He noted that the latest hostilities are "largely being priced by markets as an oil, inflation, and regional risk event, not the start of a systemic shock."
Adam Crisafulli of Vital Knowledge wrote, "Investors still believe there is no appetite from Trump to tolerate a material escalation of the U.S. military posture in the Middle East (i.e., ground troops), and if that's indeed the case, then some form of diplomatic resolution is inevitable."
Chipmakers provided buying support for U.S. equities as they attempted to recoup some of last week's steep losses.
The VanEck Semiconductor ETF rose over 2%. Micron Technology led the gains, advancing more than 5%. Astera Labs, Teradyne, and Advanced Micro Devices, Inc. (AMD) also each rose more than 3%.
On the economic data front Monday, a composite of monthly economic indicators showed U.S. leading economic indicators edged lower in June, influenced by weaker consumer spending.
The Conference Board's Leading Economic Index declined 0.2% in June to 99.1, following a 0.1% increase in May and a 0.2% gain in April.
The Conference Board noted that while partially retracing the prior two months' increases, the index fell only 0.3% in the first half of 2026, compared to a 1.1% contraction in the second half of 2025.
Justyna Zabinska-La Monica, a senior manager at The Conference Board, stated that some components of the index were little changed. The largest positive contribution came from the yield spread, followed by a slight positive contribution from the financial components.
Zabinska-La Monica said these contributions were insufficient to offset the negative impacts from weak consumer expectations and a decline in building permits.
The six- and twelve-month growth rates of the index also remained negative but stable. Consumer spending is weakening, though strong business investment in artificial intelligence is expected to support economic activity alongside improving inflation.
The LEI is designed as a predictive index. It is based on ten components, including manufacturers' new orders, new private housing building permits, stock prices, and consumer expectations, aiming to signal turning points in the business cycle.
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