U.S. stock markets delivered mixed results Monday as oil prices retreated following the U.S. and Iran's decision to pause their attacks while work resumed on restarting negotiations to end their war. According to CNBC, the S&P 500 rose less than 0.1% to 7,413.18 after spending much of the day bouncing between small gains and losses, coming off two consecutive weekly losses. The Dow Jones Industrial Average gained 0.5% to 52,210.08, while the Nasdaq Composite fell 0.2% to 24,932.08, marking its fourth straight loss. The three major stock indexes are on pace to close out this month in the red, representing the second straight monthly loss for the S&P 500 and Nasdaq. Bond yields fell with the yield on the 10-year Treasury dropping to 4.65% from 4.69% late Friday as investors weighed the impact of cooling Middle East tensions.
Oil prices experienced a dramatic reversal from last week's surge, with Brent crude dropping 6.3% to settle at $85.87 a barrel for October delivery after prices had surged to over $100 a barrel last week. As reported by CNBC, U.S. crude oil for September delivery fell 7.5% to settle at $82.61 a barrel. The war between the U.S. and Iran has sharply curtailed and at times halted traffic through the vital Strait of Hormuz, creating ripple effects throughout the world's economy with gasoline prices surging and shipping costs for most goods rising. The price decline represents a significant retreat from the 3.4% jump to around $87 a barrel that had supported Asian markets earlier in the week.
Technology companies delivered mixed results with significant divergence among major players. According to CNBC, Nvidia fell 5% and Micron Technology slumped 2.3%, while Microsoft rose 1.9% and Apple gained 1.2%. The Philadelphia Semiconductor Index fell 4.5%, putting the gauge on course for its worst month since 2002 after its strongest quarter on record. Communications companies were among the gainers with Google parent Alphabet rising 2.1%, Charter Communications jumping 6.7%, and Comcast up 2.3%. Credit card issuers also notched gains with American Express climbing 2.8%, Capital One Financial adding 2.1%, Visa rising 1.9%, and Mastercard gaining 2.2%. The mixed performance reflects the ongoing rotation away from chipmakers amid broader market uncertainty.
Asian stock markets maintained their positive momentum despite the retreat in oil prices, with Chinese memory chipmaker CXMT soaring in its debut in Shanghai and becoming China's most valuable listed company with an estimated market capitalization of 3.3 trillion yuan (nearly $490 billion). According to NDTV Profit, South Korea's Kospi climbed 2.11%, Australia's ASX 200 advanced 1.07%, and Japan's Nikkei 225 gained 1.08% on Wednesday. The positive performance came despite ongoing geopolitical uncertainties that have dominated market sentiment, with the broader MSCI Asia Pacific Index 0.5% higher after earlier volatility. Markets closed higher in Europe and Asia as the cooling of Middle East tensions provided some relief to regional equity markets.
Market participants remain focused on the U.S. Federal Reserve's policy announcement Wednesday as the central bank grapples with the impact from rising inflation due to the ongoing U.S. war with Iran and fresh U.S.-imposed tariffs globally. According to CNBC, Wall Street has a busy week ahead with reports due out on consumer confidence Tuesday and inflation on Thursday. Chris Larkin, managing director at E-Trade from Morgan Stanley, noted that "This is a week with more than its fair share of potential surprises, good and bad." The Fed's decision will provide fresh signals on interest rate outlook, with officials having kept rates on hold this year as they wait for temporary price pressures from tariffs and the war in Iran to wane. Fed officials have kept rates on hold this year as they wait for temporary price pressures from tariffs and the war in Iran to wane, but concern is mounting that inflation won't reach the central bank's 2% target unless higher rates are used to rein in demand.
