U.S. stocks opened modestly lower Monday morning as investors reacted to a renewed jump in oil prices after President Donald Trump rejected Iran’s latest response to a U.S.-backed peace proposal, extending uncertainty around the Iran war and the continued disruption in the Strait of Hormuz. The Dow Jones Industrial Average fell 69.94 points, or 0.14%, to 49,539.2 shortly after the opening bell, while the S&P 500 slipped 5.09 points, or 0.07%, to 7,393.84, and the Nasdaq Composite lost 52.78 points, or 0.20%, to 26,194.3.
Energy markets again drove early trading sentiment. June crude oil futures climbed $1.84, or 1.93%, to $97.26 per barrel after briefly trading above $100 overnight, while the CBOE Volatility Index, or VIX, rose 6.23% to 18.26, signaling increased investor anxiety.
Markets were rattled after Trump called Iran's latest proposal “totally unacceptable,” according to Reuters and Bloomberg, dampening hopes for a near-term ceasefire and keeping focus on the effective closure of the Strait of Hormuz, a key artery for global oil shipments.
Oil prices have become the market’s central macro concern as traders weigh the inflationary implications of higher gasoline and energy costs. Analysts warned that prolonged disruption in the Strait could reignite inflation pressures just as investors had grown more confident about the Federal Reserve’s path toward eventual rate cuts. Deutsche Bank said markets remain “on a knife-edge” as long as Hormuz remains constrained.
Despite the cautious tone, investors continued rotating aggressively through high-beta and crypto-linked names. Shares of Circle Internet Group swung sharply following earnings as Wall Street debated whether pending U.S. crypto legislation could materially reshape stablecoin adoption and transaction economics, according to AInvest.
Meanwhile, traders also monitored reports about China's preparations for a summit between President Trump and Chinese President Xi Jinping later this week. Wall Street hopes the summit will ease trade frictions and provide support for global growth sentiment after weeks dominated by the Iran war and oil shock headlines.
Technology shares were mixed in early trading as investors balanced enthusiasm around artificial intelligence spending against rising energy-driven inflation risks. Market breadth remained relatively narrow after the S&P 500 and Nasdaq closed at record highs last week.