Wall Street’s main indexes opened mixed, putting a volatile start to the week on Monday, as rising geopolitical tensions in the Middle East offset optimism from a strong earnings backdrop and recent record highs.
The Dow Jones Industrial Average fell 216 points or 0.44%, the S&P 500 slipped 0.12%, while the Nasdaq Composite was up 0.07%.
Markets had a volatile start following conflicting reports involving Iran and a US warship near the Strait of Hormuz, injecting fresh uncertainty into global markets already grappling with elevated oil prices.
Geopolitical tensions rattle sentiment
The latest bout of volatility was triggered by reports from Iranian media claiming that a US warship had been struck by missiles near the Strait of Hormuz.
Iran’s semi-official Fars news agency said two missiles had hit the vessel, while Tehran also claimed it had forced a US warship to turn back.
However, the United States denied the reports, with US Central Command stating that “no US Navy ships have been struck.”
The conflicting narratives left investors cautious, particularly as the conflict—now in its third month—continues to pose risks to global trade and energy markets.
Oil prices surged in response, with Brent crude rising more than 2.5% to trade above $110 a barrel, while US West Texas Intermediate crude gained about 3% to exceed $105 per barrel.
Earnings strength meets seasonal caution
The geopolitical uncertainty comes after a strong run for equities, supported by robust corporate earnings and optimism around major technology companies.
On Friday, both the S&P 500 and the Nasdaq Composite reached fresh record intraday and closing highs, gaining 0.29% and 0.89%, respectively.
The Dow Jones Industrial Average, however, lagged, falling 152.87 points, or 0.31%.
Despite the positive earnings momentum, investors are also entering a historically weaker period for equities.
Data from Fidelity shows that the S&P 500 has gained an average of about 2% between May and October since 1945, compared with roughly 7% from November through April.
Meanwhile, Berkshire Hathaway reported over the weekend that it was a net seller of stocks for the 14th consecutive quarter, a signal closely watched by investors for insights into valuations and broader market conditions.
Corporate moves add to market focus
Corporate developments also contributed to premarket movements.
Shares of GameStop fell 4.5%, while eBay surged 5.6% after GameStop unveiled a proposal to acquire eBay for about $56 billion in a cash-and-stock deal.
Elsewhere, logistics companies came under pressure after Amazon announced the rollout of “Amazon Supply Chain Services,” opening its logistics network to third-party businesses.
Shares of FedEx dropped 5.4%, while United Parcel Service fell 6.3%.
On the policy front, President Donald Trump said the US would launch “Project Freedom” to help cargo ships from non-involved nations navigate safely through the Strait of Hormuz.
“I have told my Representatives to inform them that we will use best efforts to get their Ships and Crews safely out of the Strait,” he said. “In all cases, they said they will not be returning until the area becomes safe for navigation, and everything else.”
Looking ahead, investors are preparing for the week’s key economic release: the April jobs report due Friday. Economists expect the U.S. economy to have added 53,000 jobs, significantly below the prior reading of 178,000, while the unemployment rate is forecast to hold steady at 4.3%.
As markets open the new week, the interplay between geopolitical risks, energy prices, and earnings momentum is likely to remain the dominant driver of sentiment.
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