U.S. stocks were mixed during early trading Monday as escalating tensions between the U.S. and Iran lifted oil prices and kept investors cautious. The Dow Jones Industrial Average fell 223 points to 49,276.1, while the S&P 500 slipped 8.83 points to 7,221.29 and the Nasdaq Composite edged up 17.48 points to 25,131.9.
Oil-linked geopolitical risk dominated the pre-market and early session with investors reacting to tensions in the Strait of Hormuz after Iran claimed to have attacked U.S. Navy frigate. US Central Command, which responded, with a post on X said, “No U.S. Navy ships have been struck.”
President Donald Trump’s plan to guide commercial ships through the region has yet to reassure markets, leaving crude prices elevated and equities under pressure. The VIX climbed nearly 5% to 17.83, signaling rising demand for hedges, while gold declined 1.39%, suggesting liquidity repositioning rather than full-scale flight to safety. Crude oil hovered above $102 per barrel.
Despite the macro uncertainty, investors appear reluctant to exit core growth positions, particularly in artificial intelligence. A new research note from Wedbush described the AI investment cycle as “stress-tested” by geopolitical volatility yet fundamentally intact, citing hyperscaler capital expenditures projected at $725 billion in 2026, up 77% year over year. The firm added that recent earnings across its “Power 30” portfolio have largely beaten expectations or raised guidance, reinforcing confidence in the long-term thesis.
That resilience is expected to face a near-term test as Palantir Technologies prepares to report earnings. The company is positioned as a bellwether for AI software monetization, with analysts framing the results as a potential breakout moment, or a sign that parts of the software sector are lagging the broader AI infrastructure boom, according to the AInvest preview.
Looking ahead, investors are focused on a series of near-term catalysts, including Palantir’s earnings results, after the bell today, AMD which reports Tuesday and Disney which reports Wednesday.