U.S. stocks ended Monday's session slightly lower, as renewed geopolitical tensions in the Middle East and a major share sale from Intel offset a strong earnings season. The Dow Jones Industrial Average slipped 60.95 points, or 0.11%, to close at 53,975.98. The S&P 500 edged down 0.06% to 7,753.11, while the Nasdaq Composite fell 0.32% to 26,605.36.
Hormuz uncertainty lifts oil prices
Oil prices surged more than 5% after Iran reiterated that the United States must meet several conditions before the Strait of Hormuz can fully reopen. Tehran said it was nearing an agreement with Oman on alternative shipping lanes but insisted that Washington's demands must be met first. President Donald Trump also called on Iran to compensate the U.S. for losses tied to past conflicts, signaling that negotiations remain limited.
West Texas Intermediate crude settled 5% higher at $82.16 per barrel, while Brent crude rose 5% to $87.74. The strait is a critical chokepoint for global energy supplies, and any prolonged disruption could push energy costs higher, adding to inflationary pressures. Investors are closely watching for any diplomatic progress that might ease supply risks.
Intel leads tech lower
Technology shares weighed on the broader market, led by Intel, which announced plans to raise $15 billion through a common stock offering to fund growth initiatives, including artificial intelligence investments. Intel shares fell 4%, while Nvidia lost 2.9% and Apple declined 1.5%, dragging the Nasdaq lower. Equity offerings typically dilute existing shareholders, which often triggers a negative market reaction. However, the capital raise is aimed at strengthening Intel's balance sheet and expanding its AI and semiconductor manufacturing capacity.
Investors are also bracing for key inflation reports later this week. The consumer price index is due Wednesday, followed by producer price data on Thursday. These readings are expected to provide fresh insight into the Federal Reserve's interest-rate outlook.
Earnings remain a bright spot
Despite Monday's cautious tone, Wall Street continues to draw support from a robust corporate earnings season. According to LSEG data, about 85% of the 436 S&P 500 companies that have reported quarterly results have beaten analysts' expectations. The major indexes also entered the week after posting their strongest weekly gains since April, with the S&P 500 hitting a fresh record close on Friday.
Last week's weaker-than-expected July employment report, which showed the U.S. economy unexpectedly lost 23,000 jobs, has reduced expectations for an immediate Fed rate hike. CME FedWatch now shows traders assign roughly a 52% probability of a September rate increase, down from 67% a week earlier.
As markets digest the latest developments, the combination of geopolitical risk, corporate capital-raising activities, and upcoming inflation data will likely keep volatility elevated. For more on the oil market's reaction, see oil's jump on Hormuz conditions. For a deeper look at Intel's offering, check Intel's dilution vs. AI upside. And for broader market context, see Dow slips on Hormuz and inflation.
This article is for informational purposes only and does not constitute financial advice.
