On Monday, the three major indices closed lower while international oil prices surged, as market confidence in a near-term agreement between the US and Iran to restore normal shipping through the Strait of Hormuz significantly declined. US President Donald Trump stated on social media that Iran has been demanding compensation for losses incurred during the past five months of military conflict, a request that had never been raised in prior bilateral negotiations. Trump described this as an "interesting idea," noting that he now also demands compensation from Iran for casualties caused in multiple conflicts, including the victims of the USS Cole bombing and other combat deaths. Trump further demanded compensation for families of protesters suppressed by Iran over the past 50 years, claiming 52,000 deaths occurred in the past five months of conflict. He stated that he has instructed US representatives to formally include these compensation demands in all future negotiations.
At the close of trading, the Dow Jones Industrial Average fell 60.949 points, or 0.11%, to 53,975.98; the Nasdaq Composite dropped 85.258 points, or 0.32%, to 26,605.35; and the S&P 500 declined 4.53 points, or 0.06%, to 7,753.11. Apple (AAPL.US) fell 1.5%, SpaceX (SPCX.US) rose 4%, SK Hynix (SKHY.US) dropped 1.9%, and Intel (INTC.US) declined 4%. The Nasdaq Golden Dragon China Index closed up 1.65%, with Alibaba (BABA.US) gaining 3%.
In European markets, Germany's DAX 30 fell 26.68 points, or 0.10%, to 26,328.67; the UK's FTSE 100 dropped 39.27 points, or 0.36%, to 10,861.82; France's CAC 40 rose 11.10 points, or 0.13%, to 8,726.03; the Euro Stoxx 50 gained 10.39 points, or 0.16%, to 6,534.25; Spain's IBEX 35 fell 31.41 points, or 0.16%, to 20,155.69; and Italy's FTSE MIB declined 83.19 points, or 0.15%, to 53,634.00.
In Asian markets, Japan's Nikkei 225 rose over 2%, and South Korea's KOSPI Composite Index gained 0.65%.
The US Dollar Index, which measures the greenback against six major currencies, rose 0.27% to 99.809 at the close of New York trading. At the end of trading, the euro traded at $1.1542, down from $1.1564 the previous day; the pound was at $1.3509, up from $1.3499; the dollar was at 159.24 yen, up from 157.55; the dollar was at 0.8101 Swiss francs, up from 0.8076; the dollar was at C$1.3942, up from C$1.3937; and the dollar was at 9.5016 Swedish kronor, up from 9.4701.
In cryptocurrency markets, Bitcoin fell over 1.4% to $64,119.55, while Ethereum dropped over 2% to $1,877.52.
In oil markets, light crude oil futures for September delivery on the New York Mercantile Exchange rose $3.95 to close at $82.13 per barrel, a gain of 5.05%. Brent crude oil futures for October delivery on the London Intercontinental Exchange rose $4.17 to close at $87.72 per barrel, a gain of 4.99%.
In precious metals, spot gold rose 1.1% to $4,389.29, while spot silver edged down to $65.71.
In macro news, President Trump stated on Monday that he has only had one "brief" conversation with Federal Reserve Chair Kevin Warsh since his appointment, denying reports of frequent communication. White House National Economic Council Director Kevin Hassett had previously claimed the two "often discuss economic issues," but other sources indicate the calls are irregular and infrequent. Earlier reports suggested Trump and Warsh spoke multiple times after Warsh's confirmation as Fed Chair in May, with Trump inquiring about Warsh's economic outlook and views. Trump reiterated his desire for lower interest rates but said he is "100% supportive" of Warsh, emphasizing that Fed policy is determined collectively by the Board.
Cleveland Fed President Loretta Mester stated that inflation remains above target, and the Fed may need multiple rate hikes. She noted that a single 25-basis-point hike "wouldn't have much impact on the economy," but declined to predict the exact number of hikes or the final rate level. Mester believes the current 3.50%-3.75% interest rate range is not significantly restrictive on the economy, as companies have not yet reduced growth investments due to high rates, making it "time to act." She warned that waiting longer makes it harder to bring inflation back to 2%. Mester emphasized that the labor market is not currently problematic and that July employment data will not shift her focus from inflation. She argued that markets can only assist the Fed, not replace its actions. Mester dissented at the Fed's July meeting, preferring a 25-basis-point rate hike.
President Trump extended the Jones Act shipping waiver for 90 days but added new restrictions, focusing on energy transportation. The waiver, which allows foreign ships to transport oil and other goods within the US, continues due to the Iran war disrupting crude flows and driving up fuel costs, but with a narrower scope. The new waiver targets energy transport, including gasoline, jet fuel, crude oil, naphtha, liquefied natural gas, soybean oil, and fertilizer. The Pentagon must now consult with the US Maritime Administration before deciding on individual waivers. The White House stated the waiver helps ensure continued access to critical resources for the US military and key industries, increasing domestic transport of gasoline, diesel, and jet fuel, though US shipbuilders and some lawmakers argue it undermines the Jones Act's protection of the domestic shipping industry.
In stock news, Nvidia (NVDA.US) announced a strategic partnership with Apollo Global Management, BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs, and KKR to create a standalone computing financing platform, mobilizing over $500 billion in third-party capital for building AI infrastructure over the long term. Nvidia stated the new platform transforms its computing and full-stack AI infrastructure into an investable asset class for global capital, expanding access to AI factories, enabling usage-linked long-term revenue, while supporting ecosystem growth in hardware sales and software applications.
Morgan Stanley (MS.US) launched the "US Innovation Infrastructure Initiative," aiming to drive about $1.5 trillion in capital raising, financing, advisory, and related investment activities over the next 10 years to support the next phase of US economic growth. The plan focuses on AI, advanced computing, quantum technology, semiconductors, data infrastructure, cybersecurity, aerospace, defense, and critical minerals, while advancing digital, physical, and energy infrastructure. Morgan Stanley stated the initiative supports building companies, technologies, and platforms critical to US economic and national security, integrating its investment banking, capital markets, wealth management, and investment management capabilities to support enterprises from startup to scale.
In analyst ratings, UBS Group raised the target price for Berkshire Hathaway-B (BRK.B.US) from $585 to $604.
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