U.S. Stocks Close Monday with Mixed Results

(MENAFN) US stock markets closed in divergent territory Monday, caught between surging crude prices, a bruising technology sector selloff, and conflicting geopolitical signals from Washington and Tehran — even as Federal Reserve Chair Jerome Powell sought to steady nerves over inflation.

The Dow Jones Industrial Average managed a narrow gain, advancing 0.11%, or 49.5 points, to settle at 45,216.14. The technology-heavy Nasdaq, however, bore the brunt of the session’s selling pressure, sliding 0.73%, or 153.72 points, to close at 20,794.64. The S&P 500 also retreated, shedding 0.39%, or 25.13 points, to finish at 6,343.72. The Volatility Index (VIX) — widely referred to as the “fear index” — eased 1.42% to 30.61 points.

Sentiment received a partial lift from US President Donald Trump, who signaled on Truth Social that a resolution to hostilities with Iran could be within reach. In the post, Trump said the US is “in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran,” adding that “great progress has been made.”

Yet the optimism was swiftly tempered by escalatory language from the same source. Trump simultaneously threatened that if a peace agreement is not reached “shortly” and the Strait of Hormuz is not “immediately” reopened, the US would escalate its military response, threatening strikes on Iran’s power plants, oil wells, Kharg Island and “possibly all desalinization plants.”

US Treasury Secretary Scott Bessent, speaking in an interview, offered a more measured tone, stating that Washington would eventually regain control of the Strait of Hormuz and ensure freedom of navigation either through US escorts or a multinational escort force. The contradictory signals emanating from Washington, compounded by the continued involvement of Iran-backed Houthis in Yemen, kept market participants in a defensive posture throughout the session.

Energy markets provided little comfort to equity bulls. Brent crude futures surged 1.7% to $114.51 per barrel, putting the global benchmark on course for its largest-ever monthly gain — an extraordinary 55% climb over the period. West Texas Intermediate (WTI) futures were equally aggressive, jumping 5.4% to breach $105 per barrel.

Against that backdrop, Powell stepped forward to offer reassurance, stating that despite rising energy prices, longer-term inflation expectations remain “well anchored.” While acknowledging the Fed could “eventually maybe face the question” of how to respond, he said policymakers are “not really facing it yet” because the broader economic effects remain unclear. Bond markets responded favorably, with the benchmark US 10-year Treasury yield retreating more than 2% to 4.35% following his remarks — though equity investors appeared largely unconvinced.

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