U.S. Stocks Mixed as Oil Prices Ease Following Iran War Talks

U.S. stocks drifted through a mixed trading session on Monday as oil prices fell following weekend talks between the United States and Iran on their ongoing war. The S&P 500 slipped 0.4%, pulling 1.8% below its all-time high set earlier in the month, while the Dow Jones Industrial Average gained 148 points, or 0.3%. The Nasdaq composite declined 1.3% as Big Tech stocks weighed on the broader market.

Oil prices fell sharply after U.S. Vice President JD Vance described the weekend talks as creating a "good foundation for a successful final deal." Brent crude oil fell 3.2% to $77.52 per barrel, moving closer to pre-war levels around $70, while benchmark U.S. crude oil declined 2.6% to $73.86. A potential end to the war could clear the Strait of Hormuz for oil tankers and restore Persian Gulf deliveries, though Iran's military claimed Saturday it had closed the strait again—a claim disputed by U.S. Central Command.

Despite lower oil prices, Treasury yields continued climbing due to expectations that the Federal Reserve may raise interest rates to combat inflation. The yield on the 10-year Treasury rose to 4.50% from 4.46% late Thursday and 3.97% before the war began. Traders are now betting on a nearly 90% chance the Fed will raise its federal funds rate at least once by year's end, up sharply from a 57% probability just a week earlier. Economists expect inflation measures to have accelerated to 4.1% in May from 3.8% in April.

High Treasury yields worldwide are pressuring expensive stocks, particularly those benefiting from artificial-intelligence enthusiasm. SpaceX fell 16.4% to $154.60 in its third consecutive decline following its market debut at $135 per share. Major tech stocks also tumbled, with Alphabet dropping 5%, Amazon falling 4.7%, and Broadcom sliding 4.5%. AbbVie climbed 6.2% after agreeing to acquire Apogee Therapeutics for roughly $10.9 billion, with Apogee surging 46.7%.

Abroad, the United Kingdom's FTSE 100 rose 0.7% following Labour Party leader Keir Starmer's announcement that he would step down. In Asia, Tokyo's Nikkei 225 jumped 1.5% to another all-time high, led by AI-related stocks, while South Korea's Kospi rose 0.7% to its own record.