Wall Street's main indexes opened lower on Monday, after last week's record-setting rally, as renewed worries over stalled U.S.-Iran talks lifted oil prices and tempered risk appetite. According to The Economic Times, the Dow Jones Industrial Average fell 60.1 points, or 0.12%, at the open to 49,549.07, while the S&P 500 dropped 13.6 points, or 0.18%, to 7,385.31. The Nasdaq Composite declined 111.4 points, or 0.42%, to 26,135.633 at the opening bell. This cautious opening comes after the S&P 500 and Nasdaq posted their sixth consecutive weekly gain and ended Friday at fresh record highs following a stronger-than-expected jobs report.
President Trump has rejected Iran's peace proposal, calling it 'TOTALLY UNACCEPTABLE' and raising concerns that the 10-week-old conflict could drag on. According to Reuters, Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran among other topics with Chinese President Xi Jinping. The rejection comes after Iran on Sunday reportedly released a proposal to end the war on all fronts, which included a demand for compensation for war damages and emphasised Iranian sovereignty over the Strait of Hormuz. This development has effectively ended hopes for a near-term peace deal between the US and Iran, with the conflict continuing to disrupt shipping through the key corridor.
Iran launched a significant attack on three US Navy destroyers in the Strait of Hormuz on May 7, marking the most significant exchange of fire since the fragile US-Iran ceasefire took effect in early April. According to Live Mint and latest reports, Iranian cruise missiles and drones targeted the US destroyers as they were crossing the strait, with the US military successfully intercepting all projectiles. US helicopters subsequently sank six small Iranian attack boats, while the US military described the action as self-defense. President Trump told reporters after the incident: "They trifled with us today. We blew them away." Trump claimed every missile and drone had been shot down and the attackers were "no longer with us," adding that Iran would face a far harder response if it did not sign a deal.
Brent crude has surged to $107 per barrel following Trump's rejection of Iran's peace proposal, with WTI crude futures crossing the $100-per-barrel mark, touching an intraday high of $100.37. According to Reuters, the rebound in oil prices has revived concerns that escalating tensions in the Middle East could once again spill over into inflation, supply chains, and broader market volatility. Iran has effectively shut the Strait of Hormuz, disrupting a key corridor that typically handles nearly one-fifth of the world's oil and gas shipments. The correlation between oil prices and stock markets has also turned positive over the past two weeks, meaning the two asset classes are now more likely to move in tandem rather than in opposite directions.
Strong technology earnings and chipmaker performance continue to revive market optimism about AI demand resilience, according to Live Mint reports. The Nasdaq is on pace to climb 2.8% for the week, while the S&P 500 is on track for a 1.5% weekly gain, with the Dow Jones lagging at just 0.2% week-to-date rise. Major US companies scheduled to report results this week include Cisco and Applied Materials, with heavyweights Nvidia and Walmart due to report later this month. The month began optimistically with a two-week ceasefire announcement between Iran and the United States, triggering a sharp rally in risk assets and one of the largest single-day declines in crude oil futures on record.
