Oil prices rise after Trump rejects Iran’s latest peace proposal, but U.S. stocks hold steady

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S&P Futures near records despite high oil prices

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Oil prices are rising Monday as the war with Iran threatens to drag on for longer, but the U.S. stock market is nevertheless holding near its record heights.

The price for a barrel of Brent crude oil climbed 1.6 per cent to $102.90 after U.S. President Donald Trump called Iran’s latest proposal to end their war “totally unacceptable” on Sunday. The rejection raises the stakes for Trump’s trip this week to China, where he could urge President Xi Jinping to pressure Iran into making concessions. Xi has leverage because China is the biggest buyer of Iran’s sanctioned crude oil.

The war has already sent the price for a barrel of Brent up from roughly US$70 and delivered a blast of painful inflation through the global economy. That’s because it has shut the Strait of Hormuz and kept oil tankers stuck in the Persian Gulf instead of delivering crude to customers worldwide.

• S&P 500 market updates here

Still, the U.S. stock market has been setting records recently on hopes that the war will not keep oil prices high for very long. U.S. companies are meanwhile producing even bigger profits than analysts expected, while signals suggest the U.S. economy is holding up even though households are feeling discouraged about expensive gasoline and tariffs.

On Wall Street, the S&P 500 edged up by 0.1 per cent from its record set Friday. The Dow Jones Industrial Average was down 3 points, or less than 0.1 per cent, as of 10:05 a.m. Eastern time, and the Nasdaq composite was virtually unchanged.

Mosaic helped drag on the market after the fertilizer company reported much weaker results for the latest quarter than analysts expected. The company is benefiting from higher prices for its products, but it’s also contending with much higher prices for sulfur and other raw materials that it uses because of logistics snarls created by the war with Iran.

Mosaic’s stock slipped one per cent.

Stocks of companies whose customers have the least cushion to absorb higher gasoline prices also struggled, and Dollar General fell 5.8 per cent. Businesses with big fuel bills likewise had some of the market’s sharpest losses, including drops of 4.6 per cent for Royal Caribbean and 2.6 per cent for United Airlines.

Helping to offset those losses was Fox, which rose three per cent after reporting stronger profit and revenue for the latest quarter than analysts expected.

More than four out of every five companies in the S&P 500 index that have reported their results for the latest quarter have topped profit expectations so far, and they’re on track to deliver overall growth of nearly 28 per cent, according to FactSet. If that turns out to be the case, it would be the best growth since the end of 2021.

Outside of earnings reports, Beazer Homes USA soared 30.1 per cent after Dream Finders Homes offered to buy it in a deal valuing it at roughly $704 million. A combination would create the country’s seventh-largest homebuilder, and Dream Finders is asking Beazer’s shareholders to push its management to OK the deal after making several attempts itself.

• Dow Jones updates here

Dream Finders slipped 0.2 per cent.

Tech stocks were also strong, continuing their big run amid big spending in the boom around artificial-intelligence technology. Gains of 1.4 per cent for Nvidia and 4.9 per cent for Micron Technology were two of the strongest forces pushing upward on the S&P 500.

In stock markets abroad, indexes were mixed across Europe and Asia. France’s CAC 40 fell 0.8 per cent, and South Korea’s Kospi soared 4.3 per cent for two of the world’s bigger moves.

In the bond market, Treasury yields held ticked higher. The 10-year yield edged up to 4.39 per cent from 4.38 per cent late Friday.

Yields have moderated a bit this month, but they remain well above where they were before the war began. Higher yields can raise rates for mortgages and other kinds of loans going to U.S. households and businesses, which in turn can slow the economy. Higher yields also tend to push downward on prices for stocks and other kinds of investments.

A report on Monday said the pace of sales for previously occupied U.S. homes accelerated last month, but not by as much as economists expected.

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Stan Choe, The Associated Press. AP Business Writers Chan Ho-him and Matt Ott contributed to this report.