Oil prices rose on Monday following the latest escalation in tensions between the United States and Iran, but the move is more modest than before in the war. US stocks, meanwhile, are slowly retracing their record-breaking rally.
The S&P 500 fell 0.4 percent from an all-time high and is on track for its second decline in 14 days after the United States seized an Iranian-flagged cargo ship it said tried to evade its blockade of Iranian ports. The Dow Jones Industrial Average was down 115 points, or 0.2 percent, as of 11 a.m. Eastern time, while the Nasdaq composite was down 0.7 percent.
The price of a barrel of Brent crude oil, the international standard, rose 5.1 percent to $94.98 on concerns that Iran could keep petroleum afloat in the Persian Gulf if it continues to block tankers from leaving the Strait of Hormuz.
It’s a turnaround in the last day of trading on Wall Street, where stocks rose and oil prices fell on Friday after Iran said it was reopening commercial traffic. That enthusiasm quickly dissipated after Iran again shut down the flow on Saturday following the US decision to continue its embargo on Iranian ports.
The next big deadline approaches Tuesday night at 8 pm Eastern time, which is early Wednesday Tehran time, when the ceasefire agreement between the United States and Iran is scheduled to expire.
Nevertheless, oil prices remain below the high points reached so far in the war. The price of Brent crude briefly reached above $119 per barrel when fears were at their peak. And the S&P 500 is still above where it was before the war.
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The muted moves suggest investors still see the possibility of a US-Iranian deal that could get oil flowing from the Middle East to customers around the world. It would be in the economic interest of both countries to end the war.
Largely indebted oil companies fell to some of Wall Street’s biggest losses following the rise in crude prices, as they faced a major war.
Norwegian Cruise Line Holdings fell 5.1 percent, while Carnival lost 1.4 percent.
United Airlines fell 2.4 percent, while American Airlines fell 5 percent after American said it was not interested in a merger with United. Airline shares rose sharply last week following a report that United wanted to merge with its rival.
On the winning side of Wall Street was TopBuild, a distributor of insulation and building products, which jumped 16.4 percent. QXO is buying it for about $17 billion.
QXO said the deal would make it the continent’s second-largest distributor of publicly traded real estate products, while its stock fell 8.2 percent.
One big reason why the US stock market has been so strong recently is the huge profits that US companies have reported in the first three months of 2026, and the expectation of continued growth.
While reporting stronger earnings for the latest quarter than analysts expected, several major US banks recently noted the US economy remains strong, largely due to strong spending by American consumers.
“Despite the country’s risks, earnings recovery remains the same,” according to Morgan Stanley strategists led by Michael Wilson. It has remained so strong that analysts have even raised their profit expectations since the start of the war in the spring of 2026.
Along with JPMorgan Chase, Bank of America and other big banks, about 10 percent of S & P 500 companies have already reported their results in early 2026. About nine out of 10 have delivered profits greater than analysts’ expectations, according to FactSet.
If other companies in the index are anything like what analysts expect, the total earnings per share of S&P 500 companies will end up 13 percent higher than last year, according to FactSet.
That’s great because stock prices tend to follow the path of corporate profits over time. Other major companies scheduled to report their results this week include UnitedHealth Group on Tuesday, Tesla on Wednesday and Procter & Gamble on Friday.
In stock markets abroad, indices fell in Europe following a better end in Asia. Germany’s DAX lost 1.2 percent, while Hong Kong’s Hang Seng added 0.8 percent to the world’s two biggest indexes.
© 2026 The Canadian Press
