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Wall Street closed lower on Monday as rising oil prices and escalating U.S.-Iran tensions pressured market sentiment. The Nasdaq Composite, the Dow and the S&P 500 ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.3%, or 138.31 points, to close at 52,498.70. Thirteen components of the 30-stock index ended in negative territory, and 17 ended in positive territory.
The tech-heavy Nasdaq Composite declined 1.6% or 408.43 points, to close at 25,873.18.
The S&P 500 lost 0.8% to end at 7,515.47. Out of the 11 broad sectors of the broad-market index, five ended in negative territory, while seven were in positive territory. The Information Technology Select Sector SPDR (XLK), Materials Select Sector SPDR (XLB) and the Communication Services Select Sector SPDR (XLC) fell 2.1%, 0.8% and 1%, respectively, while the Energy Select Sector SPDR (XLE) rose 3.2%.
The major loser of the S&P 500 Index was AppLovin Corporation (APP – Free Report) after its shares fell 12.7%. AppLovin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear gauge, the CBOE Volatility Index (VIX), increased by 14.2% to 17.16. A total of 15.91 billion shares were traded on Monday, lower than the last 20-session average of 21.83 billion. Declining issues outnumbered advancers by a 1.63-to-1 ratio on the NYSE. On the Nasdaq, decliners outpaced advancers by a 2-to-1 ratio.
Oil Surges on Trump’s Hormuz Measures
Oil prices have surged on Monday after President Donald Trump outlined new measures to stop Iranian attacks on oil tankers in the Strait of Hormuz.
Trump said in a statement on his Truth Social account that the United States will start charging a 20% “protection tax” on cargo traveling through the Strait of Hormuz. He said the United States will be the “protector” of the waterway, which is a critical route for crude oil exports around the world.
Oil prices surged following Trump’s announcement, which is perceived to pose a risk of supply disruptions via the Strait of Hormuz. The price of oil in the U.S. market, West Texas Intermediate (WTI), climbed by 2.4% to trade at $78 a barrel. Meanwhile, the international benchmark, Brent crude, saw a 2% gain to trade at $85 a barrel.
