US sharemarkets edged lower on Monday as tensions between the United States and Iran escalated over the weekend. The S&P 500 fell 0.24% to 7,109.14, while the Nasdaq Composite declined 0.26% to 24,404.39, snapping a 13-day winning streak, its longest since 1992. The Dow Jones Industrial Average slipped 4.87 points to 49,442.56.
In contrast, the Russell 2000 rose 0.58% to a record close of 2,792.96, also reaching a fresh intraday high, as gains in smaller-cap stocks offset weakness in large-cap indices.
Markets remain near record levels despite the renewed volatility, having recovered strongly in recent weeks. Investors appear reluctant to price in a worst-case scenario, with sentiment supported by expectations that the conflict may still be resolved.
Technology stocks were mixed, although software names outperformed, with the iShares Expanded Tech-Software Sector ETF rising more than 1%.
Earnings season is accelerating, with a broad slate of US corporates set to report this week, including UnitedHealth, 3M, United Airlines, Boeing, Tesla, IBM, American Express, Intel, Newmont and Procter & Gamble.
Oil prices rose sharply following the escalation in tensions. West Texas Intermediate crude gained 6.87% to settle at US$89.61 a barrel, while Brent crude climbed 5.64% to US$95.48.
Energy markets remain highly sensitive to developments in the Strait of Hormuz, with conflicting signals around negotiations and shipping access continuing to drive volatility.
Australian Market Outlook
Australian shares are set to open higher, despite softer leads from Wall Street, as SPI futures point to a gain of 48 points, or 0.5%, to 9,023.
Locally, companies including Atlas Arteria, HUB24 and Lynas Rare Earths are scheduled to report. In New Zealand, first-quarter CPI data and the NZIER Quarterly Survey of Business Opinion are due.
