The Dow Jones Industrial Average rose 159.95 points, or 0.32%, on Monday to close at 49,686.12, while the S&P 500 slipped 5.45 points to 7,403.05 and the Nasdaq Composite fell 134.41 points to 26,090.73. Stocks trimmed losses after Donald Trump said he had paused a planned attack against Iran to allow negotiations on a deal to end the U.S.-Israeli war with Iran, and said the United States was ready to resume attacks if there was no agreement.
The Nasdaq and the S&P 500 both finished lower for a second straight session, even as the broader market recovered from deeper losses earlier in the day. The 10-year Treasury yield climbed to its highest level since February 2025, while U.S. crude settled up more than 3% after a volatile session. Energy was the biggest sector gainer, adding 1.8%, while the heavyweight information technology sector fell 0.97% and the Philadelphia SE Semiconductor Index dropped 3.3%.
Nvidia was the S&P 500’s biggest index-point drag and fell 1.3% ahead of results due Wednesday. Traders were pricing in a 36.7% chance that the U.S. Federal Reserve would raise interest rates by 25 basis points by year-end, reflecting concern that higher oil prices could keep inflation sticky if shipping through the Strait of Hormuz is disrupted.
The market had been rallying since late March, with the S&P 500 closing Thursday more than 18% above its March 30 finish and the Nasdaq up about 28% from that point. That rebound left room for some pullback, said Burns McKinney, who described oil as the main day-to-day market driver and warned that a blockade on the Strait of Hormuz could push prices higher and increase the risk that inflation expectations become unanchored. Tim Ghriskey said the market was also seeing profit-taking after a sharp run-up.
The day’s reversal showed how quickly a market built on hopes for calmer geopolitics can be shaken by any hint that those hopes are slipping. For now, the next test is whether traders treat the Iran negotiations as a real path to relief or just another pause before the next move in oil, yields and stocks.
