US stocks presented a mixed picture during Monday's midday trading, with chipmakers broadly advancing and providing a boost to the Nasdaq and S&P 500 indexes. Crude oil prices retreated following conciliatory signals from Iran regarding negotiations.
The Dow Jones Industrial Average fell by 128.52 points, or 0.25%, to 52,017.90. The Nasdaq Composite gained 201.90 points, or 0.79%, reaching 25,722.14. The S&P 500 index rose by 28.66 points, or 0.38%, to 7,486.35.
Investor sentiment improved after Iranian Foreign Ministry spokesman Esmaeil Baghaei, speaking to reporters in the early hours of Monday Eastern Time, offered hope for a diplomatic resolution. He noted that intermediaries had continued to exchange messages with Iran during the latest round of US strikes and stated that negotiations between the adversaries could proceed based on national interests. This followed the US military's announcement of a ninth consecutive night of airstrikes on Sunday, which it said aimed to further degrade Iran's military capabilities used for attacks on commercial vessels and civilian mariners in the Strait of Hormuz.
Oil prices reversed sharply lower on Monday morning, erasing earlier strong gains. The sell-off was triggered by reports of a proposed 10-day ceasefire between the US and Iran. Earlier in the session, prices had climbed to a one-month high as the exchange of fire between the two nations further disrupted the anticipated restoration of crude supply flows that had been expected following last month's memorandum of understanding.
After giving up its gains, oil continued to trend lower. A proposal, according to Iranian sources, suggested a 10-day ceasefire to facilitate the revival of the provisional peace agreement reached last month.
According to FactSet data, the global benchmark Brent crude for September delivery (BRN00, BRNU26) fell 1.6% to $86.67 per barrel, having earlier surged as much as 3.8% to an intraday high of $91.42. However, Brent remains more than $16 above the lows hit in June when the US-Iran memorandum aimed at reopening the Strait of Hormuz was signed.
The August West Texas Intermediate contract (CL.1, CLQ26) also saw a significant reversal lower. The US benchmark was last down 2.2%, trading just below $80 per barrel, after earlier climbing to a high of $86.40.
Daniela Hathorn, Senior Market Analyst at Capital.com, commented, "Traders have 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 concerns about further disruptions to oil supply and shipping in the Strait of Hormuz."
Stephen Innes, Managing Partner at SPI Asset Management, suggested the modest pullback in oil "does not signal a market letting its guard down," but rather that "investors continue to view this conflict as within their cognitive map and something they believe they can compartmentalize." He added that the latest hostilities are "largely being priced as an oil, inflation, and regional risk event, rather than the start of a systemic shock."
Adam Crisafulli of Vital Knowledge noted, "Investors still believe Trump lacks the appetite for a material escalation in the US military posture in the Middle East (i.e., deploying ground troops), and if that's the case, then some form of diplomatic resolution is inevitable."
Chipmakers provided buying support for US equities as they attempted to recoup some of last week's significant losses. The VanEck Semiconductor ETF (SMH) rose more than 2%. Micron Technology led the gains, advancing over 5%. Astera Labs, Teradyne, and Advanced Micro Devices Inc (AMD) also rose more than 3% each.
On the economic data front, the Conference Board's Leading Economic Index (LEI) for the US edged down 0.2% to 99.1 in June, following a 0.1% increase in May and a 0.2% rise in April. The decline was attributed to weaker consumer spending.
The Conference Board stated that while partially reversing the gains of the prior two months, the index has declined 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, Senior Manager at The Conference Board, noted that some components of the index showed little change. The largest positive contribution came from the yield spread, followed by a slight positive contribution from the financial components. She stated 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, based on ten components including manufacturers' new orders, new private housing permits, stock prices, and consumer expectations, aiming to signal turning points in the business cycle.
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