Wall Street pauses after record highs as US-Iran talks falter

Major Wall Street indexes paused their advance on Monday following last week’s record-breaking rally, as renewed concerns over stalled negotiations between the United States and Iran pressured investor risk appetite.

US President Donald Trump’s swift rejection of Iran’s response to a US peace proposal fueled fears that the 10-week conflict could drag on and keep shipping through the Strait of Hormuz heavily disrupted, sending crude oil prices up around 3%.

Even so, higher oil prices have failed in recent weeks to derail the broader market momentum. Both the S&P 500 and Nasdaq closed at record highs on Friday, supported by strong corporate earnings, optimism surrounding semiconductor companies, and a robust monthly jobs report that highlighted the resilience of the US economy.

The S&P 500 and Nasdaq also touched fresh record highs again on Monday, extending gains from the previous session.

However, that resilience may soon face a test as earnings season begins to wind down and investor focus shifts toward Tuesday’s consumer price index report, which is expected to show higher inflation in April amid mounting pressure from Middle East energy prices.

Producer price data and monthly retail sales figures are also due later this week.

Robert Edwards, chief investment officer at Edwards Asset Management, said:

“The list of concerns is long, but the economy continues proving the pessimists wrong.

Big tech companies have reclaimed leadership, supported by strong and growing revenues and earnings. These companies are at the center of every major structural trend.”

By 10:08 a.m. Eastern Time, the Dow Jones Industrial Average slipped 3.54 points, or 0.01%, to 49,605.62, while the S&P 500 rose 11.38 points, or 0.15%, to 7,410.31, and the Nasdaq Composite gained 10.19 points, or 0.04%, to 26,257.27.

Eight of the 11 major S&P 500 sectors traded higher, led by the energy sector with gains of 1.5%.

The materials sector also climbed 1.3%, tracking gains in precious metals prices.

Investors are also watching an upcoming meeting between Trump and Chinese President Xi Jinping later this week, where the two leaders are expected to discuss Iran, Taiwan, artificial intelligence, nuclear weapons, and a possible extension of the critical minerals agreement.

Earnings season is also expected to gradually slow after a strong performance led by the technology sector.

Among the key companies reporting this week are networking giant Cisco Systems and semiconductor equipment maker Applied Materials, while Nvidia and Walmart are scheduled to release results later this month.

Intel shares rose 3.5% on Monday following a 14% surge on Friday after reports of a preliminary chip manufacturing agreement with Apple, while rival Qualcomm jumped 8.6% to a record high.

Meanwhile, Mosaic shares fell 2.1% after the fertilizer company withdrew its annual phosphate production guidance.

Fox Corp shares gained 4% after the media company topped Wall Street estimates for third-quarter revenue.

Elsewhere, several airline stocks declined as higher oil prices threatened profit margins, with Southwest Airlines, Delta Air Lines, Alaska Air, and United Airlines falling between 1.8% and 2%.

Advancing stocks outnumbered decliners by a ratio of 1.05-to-1 on the NYSE and 1.01-to-1 on the Nasdaq.

The S&P 500 posted 27 new 52-week highs against 30 new lows, while the Nasdaq Composite recorded 115 new highs and 91 new lows.