Wall Street Slips as Oil Prices Surge 5% on Iran-Hormuz Uncertainty

Wall Street stocks edged lower on Monday while oil prices jumped about 5% as investors weighed Federal Reserve interest rate expectations and uncertainty surrounding negotiations to reopen the Strait of Hormuz.

The Dow Jones Industrial Average slipped 0.11% to 53,975.98, while the S&P 500 declined 0.06% to 7,753.11. The Nasdaq Composite fell 0.32% to 26,605.36. U.S. equities had reached record highs on Friday after weaker-than-expected employment data reduced expectations for additional Fed rate hikes.

Oil markets posted stronger moves. Brent crude climbed $4.17, or 4.99%, to settle at $87.72 per barrel, while West Texas Intermediate rose $3.95, or 5.05%, to $82.13.

Iran said an agreement with Oman concerning transit through the Strait of Hormuz was nearing completion. However, Tehran maintained that reopening the critical energy shipping route would depend on the United States meeting several conditions, including compensation and an end to sanctions and military threats.

Investors are also preparing for Wednesday’s U.S. inflation report, which could influence the Federal Reserve’s interest rate outlook. Economists surveyed by Reuters expect July Consumer Price Index inflation to ease to 3.4% year over year from 3.5% previously.

Strong corporate earnings have meanwhile supported global stock markets. Bank of America analysts said S&P 500 earnings per share were up 30% year over year after excluding investment gains at Alphabet and Amazon. JPMorgan raised its 2026 S&P 500 earnings estimate to $365 and increased its index target to 8,000 from 7,800.

In bond markets, the U.S. 10-year Treasury yield rose to 4.701% ahead of $125 billion in new issuance. The U.S. dollar index gained 0.17% to 99.81, while the yen weakened to 159.31 per dollar.

Gold also benefited from market uncertainty. U.S. gold futures settled 0.5% higher at $4,419.70, while spot gold advanced to around $4,390 an ounce after reaching a nine-week high.

Markets will now focus on U.S. inflation data, Fed policy expectations and developments surrounding the Strait of Hormuz for the next major direction in stocks, oil, bonds and currencies.