U.S. stocks edge back from their records as oil prices rise

Storm clouds form above the New York Stock Exchange building in New York City. (AP Photo/J. David Ake)

NEW YORK (AP) — The U.S. stock market’s record-breaking rally is flagging on Monday after uncertainty rose over the weekend about what will happen next in the Iran war, while oil prices rose.

The S&P 500 slipped 0.2 per cent, coming off its latest all-time high driven by strong profit reports from U.S. companies and hopes that the global economy can avoid a worst-case scenario because of the war. The Dow Jones Industrial Average was down 155 points, or 0.3 per cent, as of 11:30 a.m. Eastern time, and the Nasdaq was down 0.3 per cent from its own record.

The moves were stronger in the oil market, where prices climbed roughly 3 per cent as tankers still find the Strait of Hormuz effectively closed. That’s keeping crude stuck in the Middle East and away from customers worldwide, including oil produced by Iran that’s being blockaded by the U.S. Navy.

Iran has offered to reopen the strait if the United States ends its blockade, while proposing that discussions on the larger question of its nuclear program would come in a later phase. But U.S. President Donald Trump seems unlikely to accept the offer, which was passed to the Americans by Pakistan.

Over the weekend, Trump told U.S. envoys not to go to Pakistan, which has been playing a crucial mediating role. By saying the Iranians could call Washington with any proposal, Trump appeared to signal he’s content to try to continue to squeeze Iran with the blockade.

The price for a barrel of Brent crude to be delivered in June climbed 3.4 per cent to US$108.92. Brent to be delivered in July, which is where more of the trading is happening in the oil market, rose 3 per cent to US$102.08 per barrel.

Brent prices were at only about US$70 per barrel before the war and have briefly shot to nearly US$120 a couple times when fears about the war have hit their heights.

Most big U.S. companies have nevertheless been reporting profits for the start of 2026 that have topped analysts’ expectations. That’s helped the S&P 500 jump nearly 13 per cent since hitting a low in late March.

Verizon Communications joined the list, and its stock climbed 3.3 per cent after the company said it added more postpaid phone customers than it lost during a first quarter for the first time since 2013. It also raised its forecast for profit growth this year, even though its revenue for the first quarter fell short of analysts’ expectations.

Domino’s Pizza helped drag on the market and fell 9.6 per cent after it reported weaker profit and revenue for the latest quarter than analysts expected.

Several of Wall Street’s most influential stocks are scheduled to deliver their own profit reports this week, including Alphabet, Amazon, Meta Platforms and Microsoft all on Wednesday. Apple will report on Thursday.

In the bond market, Treasury yields ticked higher with the rise in oil prices. The yield on the 10-year Treasury note rose to 4.33 per cent from 4.31 per cent late Friday.

The Federal Reserve will announce its latest move on interest rates Wednesday, and the consensus expectation among traders is that it will hold rates steady. Lower rates would give the economy a boost, but they would also threaten to worsen inflation when oil prices are in flux and tariffs are also threatening to raise prices for all kinds of products.

Wednesday will likely be the final meeting where Chair Jerome Powell will lead the Fed. His term as chair is scheduled to expire next month, and Trump has already named a nominee for his replacement, Kevin Warsh.

The European Central Bank, Bank of Japan and Bank of England will also be announcing their own interest-rate decisions this week.

In stock markets abroad, indexes slipped in Europe following a stronger finish in Asia. South Korea’s Kospi jumped 2.2 per cent, and Japan’s Nikkei 225 rose 1.4 per cent for two of the world’s bigger moves.

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Stan Choe, The Associated Press. AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.