The S&P 500 ended Monday's session marginally below the breakeven point, as escalating uncertainty over the potential for a lasting resolution to the US-Iran conflict dampened market sentiment. The Dow Jones Industrial Average fell 60.949 points, or 0.11%, to close at 53,975.98 points. The Nasdaq Composite lost 85.258 points, or 0.32%, finishing at 26,605.35 points. The S&P 500 index declined by 4.53 points, or 0.06%, to settle at 7,753.11 points.
Intel was a primary drag on the day, sliding 4% after the company announced plans to issue $15 billion in common stock. Other notable decliners included Nvidia and Apple, which fell 2.9% and 1.5%, respectively.
Iran indicated it is nearing an agreement with Oman to reopen the Strait of Hormuz, but Tehran maintains it will not engage in direct negotiations with the United States until certain conditions are met. According to the Tasnim News Agency, a semi-official outlet affiliated with the Islamic Revolutionary Guard Corps, Iranian Foreign Minister Abbas Araghchi stated on Sunday that "restarting negotiations is impossible" as long as the US continues to violate a memorandum of understanding signed in June and fails to compensate for its alleged "violations."
Oil prices rose on Monday amid the ongoing market uncertainty. US West Texas Intermediate crude futures settled approximately 5.1% higher at $82.13 per barrel. Crude oil inventories in the US Strategic Petroleum Reserve have fallen to their lowest level since January 1983. Meanwhile, the international benchmark Brent crude futures gained 5%, closing at $87.72 per barrel.
Last week, Treasury Secretary Scott Bessent strongly hinted in an interview that a deal was imminent. However, President Trump told Axios on Sunday that the US is "only half-negotiating" with Iran and expressed a desire for the Middle Eastern nation to feel increased economic pressure. "Everyone is tired of the back-and-forth," said Zachary Hill, Head of Portfolio Management at Horizon Investments. "But each time tensions in the Middle East flare up, the magnitude is smaller than what we've seen before, so I think that partly explains the situation today." This is especially true, he added, against the backdrop of "such strong fundamentals during earnings season."
The three major US indexes had just completed their best week since April. The S&P 500 index closed at a record high last week. Stocks were bolstered on Friday as the July nonfarm payrolls report showed an unexpected contraction in jobs, leading investors to hope the Federal Reserve might pause its interest rate hikes. According to the CME Group's FedWatch Tool, federal funds futures traders now see a roughly 52% probability of the central bank raising rates at its September meeting, down from a 67% reading a week earlier.
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