U.S. stock indexes retreated from record levels on Monday as fresh fighting in the Middle East tested an early April ceasefire, sending the Dow Jones Industrial Average down 557 points, or 1.1%, and the S&P 500 down 0.4% from their latest historical highs. The Nasdaq composite also surrendered ground, slipping 0.2%.
Oil markets saw even sharper movement, with the price of a barrel of Brent crude rising 5.8% to $114.44 after the United Arab Emirates said it came under attack by Iran. The UAE incident appeared to be linked to efforts by the United States to reopen the Strait of Hormuz, which Iran closed to trap oil tankers in the Persian Gulf and keep them from international markets. The strait closure had already driven Brent crude from roughly $70 per barrel before the war to near current highs.
President Donald Trump said Sunday the U.S. would guide ships through the strait in hopes of restoring oil flows and lowering prices, but uncertainty about the next steps pushed crude higher instead. The U.S. military said Monday that two American-flagged merchant ships successfully navigated the strait, but reported sinking six small boats as it established an enhanced security area for commercial traffic.
Despite the geopolitical jitters, the stock market has remained remarkably resilient, holding near its record peaks. AP business correspondent Seth Sutel noted that Wall Street hope persists that the global economy can avoid a worst-case scenario, and in the meantime, companies continue to deliver strong profit growth. Stock prices tend to follow corporate profits over the long term.
The earnings strength so far has been broadly based and not limited to the largest technology companies. Savita Subramanian, a strategist at Bank of America, said the median stock in the S&P 500 is tracking its best growth since 2021.
Tyson Foods reported quarterly profit and revenue that topped analyst estimates on Monday. The company sold less beef than it did a year ago but realized prices that were 11.5% higher, pushing total beef revenue slightly upward. Tyson also sold more chicken and pork at slightly higher prices, sending its stock up 8%.
Norwegian Cruise Line Holdings also delivered better quarterly profits than analysts expected, but warned that the war is raising fuel costs and making customers hesitant to book trips, particularly to Europe. The company cited some execution missteps for booking levels below its targets, and its stock fell 8.6%.
In the delivery sector, Amazon announced it is allowing Procter & Gamble, 3M, and other major companies to use its logistics network to move inventory, fulfill orders, and deliver packages directly to shoppers. The move undercut major carriers, sending UPS shares down 10.5% and FedEx down 9.1%, while Amazon rose 1.4%.
GameStop’s stock tumbled 10.1% after the company announced a proposal to buy eBay for $125 per share in cash and stock. eBay, whose total market value is nearly four times that of GameStop, rose 5.1%. GameStop said it had already acquired a 5% stake in eBay and projected it could cut $2 billion in annual costs.
Overseas, tech gains pushed South Korean markets up 5.1% and Hong Kong indexes up 1.2%. Mainland China and Japanese markets were closed for holidays, while European indexes slipped, with France’s CAC 40 falling 1.7%.
In the bond market, the yield on the 10-year Treasury note rose to 4.43% from 4.39% late Friday. The yield had stood at just 3.97% before the Iran war began, and the climb has increased the cost of mortgages and other loans for American households and businesses.