Wall Street slips as US-Iran tensions dampen sentiment
US stocks have opened mostly lower as investors monitored developments in the Middle East.
The S&P 500 and the Nasdaq have eased from record highs after a stunning rally on Wall Street last week as renewed US-Iran tensions threatened a ceasefire collapse and dented investor sentiment.
Iran opened the Strait of Hormuz on Friday, fuelling a broad market surge, with the S&P 500 and the Nasdaq posting record highs for a third straight session and marking their biggest weekly gains since May.
However, Iran closed the waterway again after the US said it had seized an Iranian cargo ship that tried to run its blockade.
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By continuing you agree to our Terms and Privacy Policy.Iran’s foreign ministry said on Monday there were no plans for a second round of negotiations with the United States.
“One explanation for this diplomatic whiplash is the power vacuum at the heart of the Iranian government. It may also be that both sides are increasing their leverage ahead of the next round of talks while still fundamentally in search of a deal,” said Lizzy Galbraith, senior political economist at Aberdeen.
“Progress towards a lasting ceasefire and the reopening of the Strait of Hormuz remains a case of two steps forward, one step back.”
Oil prices jumped 5.0 per cent on Monday, lifting the energy sector on the benchmark S&P 500 up 0.9 per cent.
In early trading on Monday, the Dow Jones Industrial Average rose 11.67 points, or 0.01 per cent, to 49,459.10, the S&P 500 lost 7.29 points, or 0.10 per cent, to 7,118.77 and the Nasdaq Composite lost 59.97 points, or 0.24 per cent, to 24,408.51.
Gains in Goldman Sachs and JPMorgan Chase buoyed the Dow.
The S&P 500 consumer discretionary and communication services indexes were the biggest weights, dragged down by declines of about 1.5 per cent each in Amazon.com and Meta Platforms respectively.
Tech stocks on the S&P 500 were subdued, with losses countered by a 1.4 per cent gain in Apple.
Marvell Technology advanced 4.4 per cent after The Information reported on Sunday that Alphabet’s Google was in talks with the chipmaker to develop two new chips to run AI models more efficiently.
The CBOE Volatility Index, known as Wall Street’s “fear gauge,” gained after falling for the past eight sessions and was last up 1.50 points at 18.98, a one-week high.
The small-cap Russell 2000 index was subdued after notching a record high on Friday.
Quarterly earnings will be in focus as investors wait to assess the effect of the Iran war on corporate results and on the broader economy, with companies including Lockheed Martin and IBM scheduled to report later this week.
Tesla will kick off results from the so-called “Magnificent Seven” cohort on Wednesday.
Data compiled by LSEG I/B/E/S expects first-quarter earnings from S&P 500 companies to grow 14.4 per cent compared with 13.7 per cent a year ago.
Among other movers, QXO shares dipped 7.2 per cent after the construction supplies distributor struck a $US17 billion ($A24 billion) deal to acquire building products distributor and installer TopBuild, whose shares jumped 16.8 per cent.
Declining issues outnumbered advancers by a 1.05-to-1 ratio on the NYSE and by a 1.13-to-1 ratio on the Nasdaq.
The S&P 500 posted 28 new 52-week highs and no new lows while the Nasdaq Composite recorded 103 new highs and 24 new lows.
