Major U.S. stock indices closed lower on Monday. The latest developments in the Middle East pushed oil prices higher, further fueling concerns about instability in the region. The United Arab Emirates reported intercepting multiple missiles launched from Iran on Monday. This marked the first activation of the UAE's missile alert system since the U.S.-Iran ceasefire began last month.
In the stock market, the Dow Jones Industrial Average fell by 557.37 points, or 1.13%, to close at 48,941.90. The Nasdaq Composite dropped 46.64 points, or 0.19%, to finish at 25,067.80. The S&P 500 index declined by 29.37 points, or 0.41%, settling at 7,200.75. Apple Inc. shares decreased by 1%, while Intel Corporation fell nearly 4%. Circle Internet Corp. saw a significant surge of nearly 20%, and Micron Technology Inc. advanced by 6%. The Nasdaq Golden Dragon China Index closed down 0.09%, with NIO Inc. shares gaining close to 3%.
The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.22% to 98.377. In late New York trading, one euro was worth $1.1692, down from $1.1731 the previous day. One pound sterling traded at $1.3534, lower than $1.3589. One U.S. dollar bought 157.24 Japanese yen, up from 157.02 yen. It also exchanged for 0.7836 Swiss francs, up from 0.7811, and 1.3611 Canadian dollars, up from 1.3587. Against the Swedish krona, the dollar was at 9.2861, compared to 9.2172.
In the cryptocurrency market, Bitcoin surpassed the $80,000 level, reaching $80,067.22. Ethereum also moved higher, trading at $2,354.58.
Oil prices climbed. The June delivery contract for West Texas Intermediate crude on the New York Mercantile Exchange increased by $4.48 to settle at $106.42 per barrel, a gain of 4.39%. The July contract for Brent crude on the London ICE Futures Europe exchange rose by $6.27 to close at $114.44 per barrel, up 5.8%.
Precious metals saw declines. Spot gold fell below the $4,600 mark, closing at $4,518.52 per ounce. Spot silver settled at $72.62 per ounce.
On the macroeconomic front, former President Donald Trump stated that the U.S. and Iran are in a state of "mini war." Speaking at a White House small business summit on May 4, Trump characterized the current conflict with Iran as a "war," calling it a "mini war." He referenced a poll showing only 32% support for a war with Iran, adding, "I don't like war, not even a little bit." He later clarified, "What we're in, I call it a 'mini war'." It was noted that Trump had previously been advised to avoid using the term "war," and House Speaker Mike Johnson had also stated that the U.S. is "not currently in a state of war."
Trump declined to confirm whether the U.S.-Iran ceasefire agreement remains in effect. In an interview, when asked if the ceasefire had ended and if military strikes might resume, Trump responded, "I can't tell you that. If I answer, you'll say this person isn't smart enough to be president." Earlier that day, Trump had warned that any Iranian attempt to attack U.S. vessels in the Strait of Hormuz or the Persian Gulf would result in them being "totally destroyed." However, he subsequently indicated that from a military perspective, hostilities with Iran were "largely over."
Reports suggest the Trump administration is considering introducing government oversight for new AI models. The White House is reportedly discussing an executive order to establish an artificial intelligence task force, bringing together tech company executives and government officials to study potential regulatory procedures. One possible plan involves establishing a formal government review process for new AI models. Last week, White House officials briefed executives from Anthropic, Google, and OpenAI on parts of the plan. The task force may consider various regulatory approaches, with a review process potentially involving multiple government agencies to ensure models meet safety standards. This move signals a notable shift in AI policy for the Trump administration. Since returning to the White House last year, Trump has been a strong supporter of AI technology, quickly dismantling the Biden-era regulatory process that required AI developers to conduct safety assessments and report models with potential military applications. This policy shift has caused some confusion. According to sources familiar with the ongoing dialogue between the White House and tech companies, some executives believe excessive government regulation could slow innovation, and there is no consensus among firms on potential regulatory methods.
Federal Reserve Bank of New York President John Williams stated that the Fed's current policy stance strikes a balance amid the uncertainty created by the war. Williams said on Monday that against the backdrop of "significant" supply chain disruptions caused by the Iran conflict, the current monetary policy stance is well-positioned to balance the risks between price stability and maximum employment. He described the environment as an "unusual set of circumstances" involving high inflation, mixed signals from the labor market, and heightened uncertainty from the Middle East conflict. Last week, the Fed held interest rates steady, but three officials dissented from the statement's "easing bias," advocating for language indicating the next move could be either a rate hike or cut. Williams avoided this debate in his remarks. He compared the supply chain disruptions from the Iran war to those experienced during the post-pandemic period but suggested there may be less room for persistent inflation this time. Williams noted, "This echoes the severe shortages and supply disruptions the global economy experienced emerging from the pandemic in 2021. But unlike then, the labor market is not currently adding to inflationary pressures." He added that core inflation, excluding imported goods and energy, has remained stable so far, and there are no significant signs of second-round effects from tariffs spreading through the economy. Williams projected U.S. economic growth of 2% to 2.25% for this year and next, with the unemployment rate remaining in the recent range of 4.25% to 4.5%.
In corporate news, Tesla's rebound in Europe continued in April. Tesla's new vehicle registrations showed a sustained recovery in several European markets for April: registrations more than doubled in Sweden, France, and Denmark; they also increased in the Netherlands but fell sharply in Norway and Spain. After two consecutive years of annual declines, Tesla's sales in Europe have shown a strong rebound this year, aided by a lower base effect and growing consumer interest in alternatives to gasoline-powered vehicles following a spike in fuel prices triggered by the Iran war.
Anthropic announced the formation of a $15 billion joint venture with Wall Street giants. Anthropic is partnering with Blackstone Group, Goldman Sachs Group, and several other Wall Street financial institutions to form a joint venture aimed at selling artificial intelligence tools to various companies, including those backed by private equity funds. The new company is expected to operate as a consulting services division for Anthropic. Sources indicate that Anthropic, Blackstone, and Hellman & Friedman are the core sponsors of the deal, with each expected to contribute approximately $3 billion. Goldman Sachs is reportedly contributing around $1.5 billion. Other participants include General Atlantic, Leonard Green & Partners, Apollo Global Management, GIC, and Sequoia Capital. The joint venture is estimated to raise a total of approximately $15 billion.
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