The S&P 500 traded down 0.1% on Monday as doubts grew over a lasting U.S.-Iran deal on the Strait of Hormuz, while Intel fell 3% after announcing a $15 billion stock offering. Oil prices climbed on the uncertainty, and traders now see lower odds of a September rate hike after last week's weak jobs data.
Intel led the day's losses on Wall Street, falling 3% after saying it would offer $15 billion in common stock. Nvidia and Apple each dropped 2%, while growing doubts over a lasting U.S.-Iran deal on the Strait of Hormuz weighed on broader sentiment.
The S&P 500 traded down 0.1% on Monday. The Nasdaq Composite declined 0.4%. The Dow Jones Industrial Average fell 136 points, or 0.3%.
Iran resists direct talks despite Oman progress
Iran said it is closing in on a deal with Oman to reopen the Strait of Hormuz, but Tehran continues to resist direct negotiations with the United States until several conditions are met. According to Tasnim News Agency, Iranian Foreign Minister Abbas Araghchi said Sunday there was "no possibility of restarting negotiations" as long as the U.S. keeps violating June's memorandum of understanding without compensating for it.
Oil prices rose on the uncertainty, with U.S. West Texas Intermediate futures up about 4% near $81 a barrel and Brent crude up 4% near $87.
Rate-hike odds ease after weak jobs data
Treasury Secretary Scott Bessent's comments to CNBC last week had strongly signaled a deal was imminent. President Donald Trump, however, told Axios on Sunday that Washington was only partially engaging with Iran to keep economic pressure on Tehran. Zachary Hill, head of portfolio management at Horizon Investments, said each flare-up in Middle East tensions has been of smaller magnitude than the one before, which he said is informing market sentiment somewhat, especially given strong fundamentals in the earnings season.
The three major indexes are coming off their best week since April, with the S&P 500 finishing last week at an all-time closing record. Stocks got a lift Friday after July's nonfarm payrolls report showed an unexpected contraction, which raised hopes that the Federal Reserve will hold off on an interest rate hike. Fed funds futures now price in an almost 50% chance of a September rate hike, down from a 67% reading a week earlier, according to the CME's FedWatch tool.
Evercore raises odds of S&P 500 hitting 9,000
Evercore ISI said the odds of its bull market case for the S&P 500 reaching 9,000 have strengthened, even as volatility increases. Evercore strategist Julian Emanuel said the pickup does not signal the rally is close to peaking, noting that further gains are likely to arrive alongside more turbulence, much as they did in 1999. He added that the conditions that typically end a bull run remain absent for now.
Evercore's AI FOMO Barometer stands at 4 out of 10, compared with a reading above 7 near the dot-com peak.
Source: CNBC
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