US stocks opened lower on Monday and then struggled to find direction, with the Dow Jones Industrial Average down 0.2% while the S AND P 500 and Nasdaq Composite hovered near the flat line as oil prices jumped on renewed Middle East worries.
The move came after Iran's semi-official Tasnim news agency reported Monday morning that Tehran had suspended talks with the United States over Israel's actions in Lebanon and Gaza. West Texas Intermediate crude rose 6% to $92 a barrel, while Brent crude gained 5% to $95, a sharp reminder of how quickly market calm can disappear when conflict threatens energy supplies.
Monday's trading mattered because investors had just come off record highs in May, and the market was already trying to absorb two forces at once: the AI trade and the risk that a widening confrontation in the Middle East could keep inflation hotter for longer. Traders were also pricing in a roughly 40% chance that the Federal Reserve would raise rates by 25 basis points, a bet that can harden fast when oil moves higher.
Barry Diller's People Inc. added another jolt to the day, saying it had submitted an $18 billion offer to buy the rest of MGM at $48.30 a share in cash, a 24% premium to the stock's average price over the past 30 days. MGM jumped about 14% on the news. People Inc. already owns a 26.1% stake in the company, and Diller said he believes the market undervalues the durability of MGM's assets and sees a compelling chance to support the next phase of growth.
The same technology wave that has been lifting shares also split them Monday, with Nvidia's new AI laptop chip for Windows computers helping Microsoft and hurting Intel. That left the broader market trying to weigh a possible earnings boost from artificial intelligence against the strain of higher oil, which had already seen West Texas Intermediate suffer nearly 17% in May, its biggest monthly decline since April 2025.
For investors, the next test comes Friday, when the nonfarm payrolls report could help shape expectations for the Fed's rate path. Until then, the S AND P 500 is stuck in the middle of two stories that keep pulling in opposite directions: the promise of faster growth from AI and the threat that a hotter oil market will make policy tighter, not looser.
