U.S. Stocks Seeing Modest Weakness Following Last Week’s Spike
Currently, the Nasdaq is down 76.71 points or 0.3 percent at 24,391.77, the S&P 500 is down 9.72 points or 0.1 percent at 7,116.34 and the Dow is down 17.54 points or less than a tenth of a percent at 49,429.89.
The modest weakness on Wall Street comes amid concerns about the re-escalation of tensions between the U.S. and Iran following the latest developments in the Middle East.
Over the weekend, Iran once again closed the Strait of Hormuz and purportedly fired on tankers in the vital waterway, blaming the U.S. blockade of Iranian ports for the moves.
President Donald Trump called Iran’s actions a “total violation” of the ceasefire agreement between the U.S. and Iran, which is currently set to expire this week.
In a post on Truth Social, Trump also said he is sending representatives to Islamabad, Pakistan, for talks with Iran, although Tehran has denied there are plans for a second round of negotiations.
Trump once again threatened to knock out every single power plant and bridge in Iran if the country refuses to make a deal.
The latest threats combined with news that U.S. forces have seized an Iranian-flagged cargo ship in the Gulf of Oman, have contributed to a significant rebound by the price of crude oil.
U.S. crude oil futures are currently surging by nearly 7 percent but have given back ground after reaching a high above $90 a barrel.
Some traders may also be looking to cash in on last week’s strong gains, although selling pressure has remained relatively subdued amid persistent optimism about an eventual U.S.-Iran deal.
“Oil initially jumped higher on renewed supply fears but has since struggled to extend gains, reflecting uncertainty rather than conviction,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “Equities, meanwhile, are softer but far from panicked, suggesting investors are not yet fully pricing a worst-case scenario.”
She added, “This disconnect highlights a broader theme: markets are aware of the risks, but are still leaning toward the belief that escalation will ultimately be avoided.”
Sector News
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Gold stocks are seeing notable weakness, however, with the NYSE Arca Gold Bugs Index falling by 1.4 percent amid a decrease by the price of the precious metal.
Airline stocks have also moved to the downside following last Friday’s spike, while oil producer stocks are rebounding along with the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index is down by 1 percent, the German DAX Index is down by 0.9 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.
In the bond market, treasuries are giving back ground following the strength seen during last Friday’s session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 4.264 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Discover more from stock updates now
Subscribe to get the latest posts sent to your email.
