Wall Street falls as oil surges on Middle East tensions

Wall Street oil Middle East tensions drove markets lower on Monday, as U.S. stocks pulled back from record highs while crude prices surged amid renewed instability in the region.

The S&P 500 fell 0.4%, retreating from its latest peak. The Dow Jones Industrial Average dropped 561 points, or 1.1%, while the Nasdaq Composite slipped 0.2%.

Oil prices jump as tensions escalate

The biggest move came in energy markets.

Brent crude jumped 5.8% to settle at $114.44 per barrel, extending a sharp rally that began after the outbreak of the Iran war earlier this year.

Prices surged after the United Arab Emirates reported an attack attributed to Iran — the first since a fragile ceasefire began in early April.

The escalation raised fresh concerns about disruptions in the Strait of Hormuz, a critical shipping route for global energy supplies.

Markets react to uncertainty, not just fundamentals

Investors have been navigating a delicate balance.

On one hand, corporate earnings remain strong. On the other, geopolitical risks are injecting volatility into markets that had been trading near record highs.

Despite the latest decline, optimism persists that the global economy can avoid a worst-case scenario tied to the conflict.

Corporate earnings help limit losses

Strong earnings from several major companies helped cushion the market’s drop.

Tyson Foods rose 4.2% after beating expectations. Higher meat prices offset lower beef volumes, while chicken and pork sales improved.

However, not all companies benefited.

Norwegian Cruise Line Holdings fell 9.6%, citing weaker bookings and rising fuel costs linked to the conflict.

Amazon move hits logistics giants

Shares of UPS and FedEx dropped sharply — both down around 9% — after Amazon expanded its logistics services to external clients.

The move could disrupt traditional delivery providers by allowing large companies to rely directly on Amazon’s infrastructure.

GameStop shakes up markets again

GameStop fell 9.4% after proposing a takeover of eBay, offering $125 per share in cash and stock.

The bid surprised investors given eBay’s significantly larger market value. Still, eBay shares rose 4.8% on the news.

Rising yields add pressure

Bond markets also reflected growing uncertainty.

The yield on the 10-year U.S. Treasury climbed to 4.44%, up from 4.39% late Friday. Rising yields, driven partly by higher oil prices, increase borrowing costs for households and businesses.

That adds another layer of pressure on the economy, especially as inflation risks remain elevated.

Global markets mixed

Outside the U.S., markets showed mixed performance.

Asian stocks rose, with gains in South Korea and Hong Kong led by tech companies. European markets, however, declined, reflecting broader concerns about energy costs and regional exposure to the conflict.

Markets are increasingly sensitive to geopolitical shocks. While corporate profits remain strong, rising oil prices and uncertainty around the Iran conflict continue to test investor confidence.