U.S. stocks traded higher at the start of the week as investors looked for signs that the conflict between the U.S. and Iran could cool down. The move came even as oil prices stayed volatile and traders weighed the risk of more disruption in global energy markets.
The S&P 500 rose 0.44% to 6,611.83, the Nasdaq Composite gained 0.54% to 21,996.34, and the Dow Jones Industrial Average added 165.21 points, or 0.36%, to 46,669.88. Market sentiment improved after reports that ceasefire terms were being discussed, although the outcome remained uncertain and the deadline for a partial deal looked difficult to meet.
Energy Prices Stayed in Focus
Oil remained the key driver behind the day’s moves, with crude prices swinging sharply through the session. West Texas Intermediate for May rose 0.78% to $112.41 a barrel, while Brent crude increased 0.68% to $109.77 a barrel.
Traders reacted to reports that U.S. and Iranian officials, along with regional mediators, were exploring a possible 45-day ceasefire that could open the way to a more permanent settlement. Reuters also reported that a separate framework had been delivered to both sides, with a possible immediate ceasefire and reopening of the Strait of Hormuz if the plan is accepted.
Trump Raises Pressure on Iran
President Donald Trump kept pressure on Tehran by warning that the U.S. could target Iranian power plants and bridges if the Strait of Hormuz is not reopened by 8 p.m. ET on Tuesday. He also repeated that the U.S. wanted influence over Iranian oil, while saying he did not want to “go further.”
Those comments helped keep oil and volatility elevated, with the CBOE Volatility Index, or VIX, holding above 24. The level suggested that traders still expect large moves in equities if the conflict worsens or if negotiations fail.
What Investors Watched on Monday
- Possible ceasefire talks between the U.S. and Iran.
- The risk of a prolonged disruption to the Strait of Hormuz.
- Rising crude prices and their effect on inflation expectations.
- The VIX staying elevated, signaling continued market caution.
- Broad gains in major U.S. indexes despite geopolitical tension.
Michael Rosen, chief investment officer at Angeles Investments, said markets may be underestimating the scale of the economic disruption. He warned that the “immediate and intermediate impact of the energy disruption is, I think, likely to be under appreciated by the markets, meaning energy prices staying higher for longer.”
Market Context Heading Into the Week
Stocks entered the session after a strong prior week for the S&P 500, which rose 3.4%, according to a correction issued with the data. The latest advance suggested investors were still willing to buy risk assets, but the tone remained fragile because the next move in oil, diplomacy, and military posture could quickly change the outlook.
The coming sessions are likely to hinge on whether ceasefire talks show progress and whether crude prices stabilize. If the Strait of Hormuz stays under threat, energy shares may continue to outperform while broader indexes remain sensitive to every new headline from the region.
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