Iran Drama Strengthens, US Indexes Slightly Weaken
US stocks moved mixed on Monday, with major indexes slightly lower despite escalating US-Iran tensions over the weekend. The S&P 500 fell 0.2%, the Nasdaq weakened 0.3%—ending a 13-day rally—while the Dow edged down 0.01%. Meanwhile, the Russell 2000 rose 0.5% and briefly hit a record intraday high.
The relatively limited movement reflects the market's continued difficulty pricing in a worst-case scenario of war, especially after the rally brought stocks back from near-correction levels to near their highs. Amid the uncertainty, some market participants continued to hold onto the assumption that Washington and Tehran would eventually reach a compromise, preventing the risk-off response from escalating into a deeper sell-off.
Sector rotation was seen in technology, particularly software stocks. The iShares Expanded Tech-Software Sector ETF (IGV) rose more than 1%, indicating that selective interest in growth segments persisted despite worsening geopolitical headlines.
On the geopolitical front, President Donald Trump announced that the US had shot down and seized an Iranian-flagged cargo ship in the Gulf of Oman. Trump stated that the ship was under US Treasury sanctions due to a history of illegal activity and stated that the US had "full control" of the ship and was inspecting its cargo. This development comes after Iran refused to participate in the next round of peace talks planned by the US in Pakistan.
Trump also renewed his threat to destroy power plants and bridges in Iran if Tehran does not agree to a deal with the US. A ceasefire between the two countries is scheduled to expire this week, keeping markets sensitive to diplomatic headlines and the risk of escalation. (Arl)*
Source: Newsmaker.id
