The U.S. stock market saw a decline Monday, marking a retreat from the record highs achieved recently. The S&P 500 fell by 0.4% from its latest all-time peak, while the Dow Jones Industrial Average experienced a more significant drop of 561 points, or 1.1%. The Nasdaq composite also recorded a small decrease of 0.2%.
In contrast, oil prices surged significantly, with Brent crude rising 5.8% to reach $114.44 per barrel. This spike followed an attack on the United Arab Emirates, a U.S. ally, attributed to Iran. This incident marked the first military action since a ceasefire took effect in early April, raising concerns over the stability of that truce. The attacks reportedly came in response to recent U.S. actions aimed at securing the Strait of Hormuz, a critical passage for oil shipments.
The situation has become increasingly tense as Iran’s closure of the strait has left tankers stranded in the Persian Gulf, exacerbating the global supply chain crisis. Oil prices had already climbed from approximately $70 per barrel prior to the outbreak of hostilities. President Trump announced over the weekend that the U.S. would escort ships through the strait to facilitate the flow of oil and help stabilize prices, but these assurances only fueled market uncertainty.
Amid this geopolitical turmoil, the U.S. military confirmed that two American-flagged merchant vessels safely navigated the Strait of Hormuz. It also reported the sinking of six small boats during operations aimed at enhancing maritime security.
Despite ongoing challenges related to the conflict with Iran, the U.S. stock market has shown resilience, reaching new highs in recent months. Investors remain optimistic about the global economy’s ability to weather the situation, fueled by steady corporate profit growth. A recent report indicated that the median stock in the S&P 500 is on track for its best growth since 2021, largely driven by broad-based earnings successes.
Tyson Foods was among the companies that surpassed analysts’ expectations for both profit and revenue during the last quarter. Although sales volumes for beef declined compared to last year, prices were 11.5% higher, contributing to an increase in overall revenue. This performance boosted Tyson’s stock by 4.2%, helping to mitigate some of the losses in the broader market.
Norwegian Cruise Line Holdings also reported better-than-expected results, but expressed concerns about the ongoing conflict, which has impacted fuel costs and caused potential travelers to reconsider their plans. As a result, its stock fell by 9.6%.
In other market moves, UPS and FedEx experienced sharp declines of approximately 9.7% and 9.3%, respectively, as Amazon disclosed a strategic change allowing major brands to utilize its logistics services, potentially undermining their business models. Conversely, Amazon’s share price rose by 0.9%.
GameStop’s stock plunged 9.4% after the company announced its intention to acquire eBay at $125 per share, despite eBay’s market value being nearly four times larger than GameStop’s. eBay’s shares climbed 4.8% following the news.
Internationally, South Korea’s markets saw a gain of 5.1%, buoyed by tech stock performances, while Hong Kong’s index rose 1.2%. Conversely, European markets struggled, with France’s CAC 40 index falling by 1.7%.
In the bond market, Treasury yields increased alongside oil prices, with the yield on the 10-year Treasury note rising to 4.44%—up from 4.39% on Friday and significantly higher than the 3.97% seen before the onset of the conflict. This rise in yields has contributed to higher mortgage rates and borrowing costs for U.S. households and businesses.
