Oil prices rise and U.S. stocks give back a bit of their record-breaking rally

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

NEW YORK (AP) — Oil prices climbed Monday following the latest rise of tensions  between the United States and Iran, but the moves were more modest than they were earlier  in the war. U.S. stocks, meanwhile, gave back a bit of their record-breaking rally.

The S&P 500 slipped 0.2 per cent from its all-time high for just its second drop in 14 days after the United States seized an Iranian-flagged cargo vessel that it said had tried to evade its blockade of Iranian ports. The Dow Jones Industrial Average dipped 4 points, or less than 0.1 per cent, and the Nasdaq composite fell 0.3 per cent.

The price for a barrel of Brent crude oil, the international standard, climbed 5.6 per cent to settle at US$95.48 on worries that Iran could keep petroleum pent up in the Persian Gulf if it continues to block tankers from exiting the Strait of Hormuz.

It’s a turnaround from the prior trading day on Wall Street, when stocks soared and oil prices tumbled after Iran said Friday it was reopening the strait to commercial traffic. That enthusiasm vanished quickly after Iran closed the strait again Saturday following the U.S. decision to press ahead with its blockade of Iranian ports.

The next big deadline is looming on Tuesday night at 8 p.m. Eastern time, which is early Wednesday Tehran time, when a ceasefire agreement between the United States and Iran is scheduled to expire.

Still, oil prices remain well below the high points reached so far in the war. Brent crude’s price briefly got above US$119 per barrel when fears were at their highest. And the S&P 500 is still above where it was before the war.

Monday’s relatively muted moves suggest investors still see a possibility of a U.S.-Iranian agreement that could get oil flowing again from the Middle East to customers worldwide. It would be in both countries’ economic interests to end the war.

Companies with big fuel bills fell to some of Wall Street’s larger losses following the rise in crude’s cost, as they have through much of the war.

Norwegian Cruise Line Holdings dropped 3.5 per cent, and Royal Caribbean Group lost 1.1 per cent.

United Airlines sank 2.8 per cent, and American Airlines fell 4.2 per cent after American said it’s not interested in a merger with United. Airline stocks had flown higher last week following a report saying United wanted to combine with its rival.

On the winning side of Wall Street was TopBuild, a distributor of insulation and building products, which jumped 19.4 per cent. QXO is buying it in a deal valued at roughly US$17 billion.

QXO said the deal would make it the continent’s second-largest publicly traded building products distributor, and its stock fell 3.1 per cent.

All told, the S&P 500 fell 16.92 points to 7,109.14. The Dow Jones Industrial Average dipped 4.87 to 49,442.56, and the Nasdaq composite slipped 64.09 to 24,404.39.

One big reason the U.S. stock market has been so strong recently is the big profits that U.S. companies have been reporting for the first three months of 2026, as well as expectations for continued growth.

While reporting stronger profits for the latest quarter than analysts expected, several of the biggest U.S. banks said last week that they see the U.S. economy remaining resilient, particularly because of solid spending by U.S. consumers.

“Despite geopolitical risks, the earnings recovery remains intact,” according to Morgan Stanley strategists led by Michael Wilson. It’s remained so solid that analysts have even raised their profit expectations since the war began for the spring of 2026.

Along with JPMorgan Chase, Bank of America and other big banks, about 10 per cent of companies in the S&P 500 have already reported their results for the start of 2026. Nearly nine out of 10 have delivered a bigger profit than analysts expected, according to FactSet.

If the rest of the companies in the index match analysts’ expectations, overall earnings per share for S&P 500 companies will end up 13 per cent higher than a year earlier, according to FactSet.

That’s big because stock prices tend to follow the path of corporate profits over the long term. Other companies scheduled to report their results this week include UnitedHealth Group on Tuesday, Tesla on Wednesday and Procter & Gamble on Friday.

In stock markets abroad, indexes fell in Europe following a better finish in Asia. Germany’s DAX lost 1.2 per cent, and Hong Kong’s Hang Seng added 0.8 per cent for two of the world’s bigger moves.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.

By Stan Choe, The Associated Press.