U.S. Stocks Slip as Oil Prices Rise After Trump Rejects Iran Peace Proposal

U.S. stock markets closed lower on Monday, with the Dow Jones Industrial Average falling about 0.67%. The S&P 500 and Nasdaq Composite also dropped, slipping 0.77% and 0.92% respectively. Investors are uneasy as oil prices climbed sharply following a rejection of an Iranian peace proposal by U.S. President Donald Trump.

The proposal, which aimed to reopen the strategically important Strait of Hormuz and ease tensions, was turned down, raising concerns that the conflict could drag on and disrupt global energy supplies. This uncertainty pushed crude oil prices up by more than 3%, worsening inflation worries.

Higher oil prices have led to a rise in U.S. Treasury yields, making bonds more attractive compared to stocks. This shift is putting pressure on equity markets, especially on sectors sensitive to interest rates. The expected path of Federal Reserve interest rate hikes is also weighing on investors’ minds, with markets pricing in a strong chance of another increase in October.

Among the stocks, technology giant Nvidia saw gains after announcing a massive $150 billion share buyback programme, which helped limit losses in the tech sector. However, other large companies like Qualcomm, Boeing, and Intel faced declines during the session.

Market breadth was negative, with more stocks falling than rising on both the New York Stock Exchange and Nasdaq. The Cboe Volatility Index, a measure of market risk, rose, reflecting the cautious mood among traders.

Looking ahead, investors are watching closely for key U.S. economic data due this week. Inflation figures and the monthly jobs report will provide clues about the economy’s strength and influence the Federal Reserve’s next moves.

Overall, the market is navigating a tricky mix of geopolitical risks, rising energy costs, and monetary policy uncertainty, which could continue to shape trading in the near term.