US stocks drop as Middle East stalemate pushes oil higher

According to fresh market updates, US stocks declined on Monday as fading hopes of a breakthrough in the Middle East and rising inflation concerns weighed on sentiment.

The Nasdaq 100 Index declined 0.8% at 9:55 a.m. in New York, putting the technology-heavy gauge on track to give back upside made over the previous two sessions. Notable decliners include ARM Holdings Plc, Sandisk Corp. and Datadog Inc. The S&P 500 Index declined 0.5%.

Iran and the US seemed far apart on a new ceasefire deal as well as reopening the Strait of Hormuz, with Tehran saying it’s sticking to a proposal rejected by US President Donald Trump. The stalemate has pushed Brent crude to around $107 a barrel even as Saudi Arabia’s key oil pipeline started exporting oil again. At the same time, a selloff in US Treasuries resumed.

“As much as the Administration will likely spend a lot of time highlighting the existing of worthwhile ‘talks’ between now and the midterm election, it does not look like anything significant will take place,” stated Miller Tabak’s Matt Maley. “As long as Iran insists on having control of the Strait of Hormuz, any dip in crude prices will likely be quite short-lived.”

The week is filled with key economic notes that are anticipated to add evidence that the US economy is strengthening. That would bolster the case made by several The US central bank officials that interest rates should be elevated. Tuesday will get the ball rolling, with consumer confidence data for September and August JOLTS data.

Additionally likely to be in focus is the state of the artificial intelligence trade, with Micron Technology Inc. scheduled to report results on Wednesday after the market close. Kathleen Brooks, research director at XTB, noted that stocks linked to the theme have been “swinging between two extremes” over the last few weeks.

“Market participants will be watching margins, topline, projected demand and earnings,” Brooks stated of Micron’s results. “Margins are particularly in focus due to surging memory costs.”

Among single-stock moves, Nvidia Corp. advanced after boosting its share buyback plan by a record $150 billion. MongoDB Inc. plunged after Meta Platforms Inc. tapped its president and chief executive officer to lead a new AI platform for enterprise customers.