NEW YORK (AP) — Oil prices are climbing Monday following the latest rise of tensions between the United States and Iran, though the movements are more modest than they were earlier in the conflict. U.S. stocks, meanwhile, are giving back a portion of their record-breaking rally.
The S&P 500 slipped 0.4% from its all-time high and is on track for only its second drop in 14 days after the United States seized an Iranian-flagged cargo vessel that it claimed had attempted to evade its blockade of Iranian ports. The Dow Jones Industrial Average was down 109 points, or 0.2%, as of 2 p.m. Eastern time, and the Nasdaq composite was 0.5% lower.
The price for a barrel of Brent crude oil, the international benchmark, climbed 5.4% to $95.28 amid concerns that Iran could restrict petroleum flow in the Persian Gulf if it continues to block tankers from exiting the Strait of Hormuz.
This marks a reversal from the last trading day on Wall Street, when stocks surged and oil prices fell Friday after Iran announced it was reopening the strait to commercial traffic. That optimism quickly faded after Iran closed the strait again Saturday following the U.S. decision to proceed with its blockade of Iranian ports.
A significant deadline looms on Tuesday night at 8 p.m. Eastern time (early Wednesday Tehran time), when a ceasefire agreement between the United States and Iran is scheduled to expire.
Despite this, oil prices remain well below the peak points reached so far in the conflict. Brent crude’s price briefly surpassed $119 per barrel when anxieties were at their highest. And the S&P 500 is still above its pre-conflict level.
The subdued market reactions suggest investors still perceive a possibility of a U.S.-Iranian agreement that could restore oil flow from the Middle East to global customers. Ending the conflict would serve the economic interests of both countries.
Companies with substantial fuel expenses experienced some of Wall Street’s larger losses following the increase in crude costs, a trend observed throughout much of the conflict.
Norwegian Cruise Line Holdings dropped 4.3%, and Carnival lost 1.4%.
United Airlines slipped 2.7%, and American Airlines fell 4.8% after American stated it is not interested in a merger with United. Airline stocks had risen last week following a report suggesting United wanted to combine with its rival.
On the positive side of Wall Street was TopBuild, a distributor of insulation and building products, which jumped 18.3%. QXO is acquiring it in a deal valued at approximately $17 billion.
QXO stated the deal would make it the continent’s second-largest publicly traded building products distributor, and its stock fell 5%.
A major factor contributing to the recent strength of the U.S. stock market is the robust profits U.S. companies have been reporting for the first three months of 2026, along with expectations for sustained growth.
While reporting stronger profits for the latest quarter than analysts expected, several of the largest U.S. banks recently indicated that they foresee the U.S. economy remaining resilient, particularly due to solid spending by U.S. consumers.
“Despite geopolitical risks, the earnings recovery remains intact,” according to Morgan Stanley strategists led by Michael Wilson. This recovery has been so solid that analysts have even raised their profit expectations for the spring of 2026 since the conflict began.
Alongside JPMorgan Chase, Bank of America, and other major banks, about 10% of companies in the S&P 500 have already released their results for the start of 2026. Nearly nine out of ten have reported higher profits than analysts anticipated, according to FactSet.
If the remaining companies in the index merely meet analysts’ expectations, overall earnings per share for S&P 500 companies will end up 13% higher than a year earlier, according to FactSet.
This is significant because stock prices tend to follow the trajectory of corporate profits over the long term. Other major companies scheduled to report their results this week include UnitedHealth Group on Tuesday, Tesla on Wednesday, and Procter & Gamble on Friday.
In the bond market, Treasury yields mostly rose. The yield on the 10-year Treasury, which influences mortgage rates, edged up to 4.25% from 4.24% late Friday. The yield was at just 3.97% in late February, before the conflict with Iran erupted.
In international stock markets, indexes fell in Europe following a stronger close in Asia. Germany’s DAX lost 1.2%, and Hong Kong’s Hang Seng added 0.8% for two of the world’s more significant movements.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.
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