Wall Street closed slightly lower on Monday as investors weighed renewed uncertainty over the reopening of the Strait of Hormuz, rising oil prices and a busy week of inflation data that could shape expectations for Federal Reserve policy.
The Dow Jones Industrial Average fell 60.95 points, or 0.11%, to close at 53,975.98.
The S&P 500 slipped 0.06% to 7,753.11 after ending at a record high on Friday, while the Nasdaq Composite declined 0.32% to 26,605.36.
Investor sentiment remained cautious after hopes of a near-term breakthrough in Middle East negotiations faded, even as corporate earnings continued to provide support for equities.
Hormuz uncertainty lifts oil prices
Markets remained focused on developments surrounding the Strait of Hormuz after Iran reiterated that the United States must meet several conditions before the strategic shipping route can reopen.
Iran said it was nearing an agreement with Oman on new shipping lanes through the strait but maintained that Washington must meet its demands before traffic resumes.
At the same time, US President Donald Trump called for Iran to compensate the United States for losses related to previous conflicts, while signaling that negotiations remained limited.
The uncertainty pushed oil prices sharply higher.
US West Texas Intermediate crude settled 5% higher at $82.16 per barrel, while Brent crude rose 5% to settle at $87.74 per barrel.
The Strait of Hormuz remains a critical route for global energy supplies, and prolonged disruption has fueled concerns over higher energy costs and persistent inflation.
Investors are watching closely for any progress that could ease supply risks and reduce pressure on commodity prices.
Intel leads chip stocks lower as markets eye inflation data
Technology shares also weighed on the broader market, led by Intel after the chipmaker announced plans to raise $15 billion through a common stock offering to fund growth initiatives, including artificial intelligence investments.
Intel shares fell 4%, while Nvidia lost 2.9% and Apple declined 1.5%, contributing to weakness in the Nasdaq.
The proposed share sale comes as Intel seeks additional capital to strengthen its balance sheet and expand its AI and semiconductor manufacturing ambitions.
However, equity offerings typically dilute existing shareholders, prompting a negative market reaction.
Investors are also preparing for key inflation reports later this week, with the consumer price index due on Wednesday followed by producer price data on Thursday.
The readings are expected to provide fresh insight into the Federal Reserve’s interest-rate outlook.
Earnings remain a bright spot for equities
Despite Monday’s cautious session, Wall Street continues to receive support from a strong corporate earnings season.
Around 85% of the 436 S&P 500 companies that have reported quarterly results have exceeded analysts’ expectations, according to LSEG data.
The major indexes also entered the week after posting their strongest weekly gains since April, with the S&P 500 recording a fresh all-time closing high on Friday.
Markets were also supported by last week’s weaker-than-expected July employment report, which showed the US economy unexpectedly lost 23,000 jobs.
The data reduced expectations for an immediate Federal Reserve rate increase, with CME FedWatch showing traders now assign roughly a 52% probability of a September rate hike, down from 67% a week earlier.
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