Wall Street’s main indexes were muted on Monday, as stalled peace talks between the United States and Iran and rising oil prices kept investors cautious ahead of a crucial week for earnings and monetary policy.
The S&P 500 slipped about 0.04%, while the Nasdaq Composite declined 0.28%.
On the other hand, Dow Jones Industrial Average gained 96 points.
Geopolitics and oil in focus
Investor sentiment remained under pressure as tensions in the Middle East showed little sign of easing.
US President Donald Trump canceled plans to send envoys to Pakistan for ceasefire talks related to Iran, signaling a setback in diplomatic efforts.
“Too much time wasted on traveling, too much work!” the president wrote in a post. “Nobody knows who is in charge, including them. Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”
Iran’s Foreign Ministry spokesperson Esmaeil Baqaei said no meeting between Tehran and Washington is currently planned, adding to uncertainty around negotiations.
Tensions also escalated near the Strait of Hormuz after Iran’s Islamic Revolutionary Guard Corps boarded two container ships near the vital shipping lane, a key artery for global crude flows.
The trajectory of oil prices remains a major unknown, particularly with the Strait still closed.
Brent crude futures were trading about 1% higher on Monday and are nearly 46.7% above pre-war levels. West Texas Intermediate crude rose around 1% to above $95 a barrel, while Brent climbed past $106 per barrel.
Earnings strength meets uncertainty
Markets have drawn some reassurance from a strong start to the earnings season.
Of the 139 companies in the S&P 500 that had reported results as of Friday, 81.3% exceeded earnings expectations, according to LSEG data. This compares with a four-quarter average of 78.1%.
However, questions remain about the durability of these results. Some analysts have cautioned that current earnings reflect only a limited period of disruption linked to the Middle East conflict and may not fully capture longer-term risks.
On the corporate front, individual stocks saw notable moves.
Qualcomm rose 6.4% after an analyst said OpenAI was working with the chipmaker and Taiwan’s MediaTek to develop smartphone processors.
Domino’s Pizza fell 7.7% after missing first-quarter sales estimates, while Nvidia gained nearly 1.18% after rising 4.3% in the previous session, reclaiming a market valuation above $5 trillion.
Focus shifts to Federal Reserve
Attention is also turning to the Federal Reserve, which is set to meet in Washington this week.
The gathering could mark the final meeting for Chair Jerome Powell before a potential leadership transition.
Republican Senator Thom Tillis said he would allow the Senate confirmation of Fed chair nominee Kevin Warsh to proceed after the Department of Justice dropped an investigation into Powell that Tillis said had threatened the central bank’s independence.
A Reuters poll of economists last week indicated that the Federal Reserve is likely to hold off on cutting interest rates for at least six months.
The week ahead is also critical for corporate earnings, with five of the “Magnificent Seven” companies set to report results, raising expectations for a market already priced for strong growth.
Despite geopolitical tensions, US equities have shown resilience.
The S&P 500 and Nasdaq Composite ended last week at record highs, with the S&P 500 up more than 9% in April and the Nasdaq gaining over 15%. The Dow has risen more than 6% month to date.
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