Stocks pull back from records as Iran halts negotiations
U.S. stocks slipped early Monday after Iran said it would suspend talks with the United States, pulling major indexes back from record highs reached in May. The comments added geopolitical pressure to a market already weighing higher oil prices, while Nvidia’s new AI chip helped limit losses in technology shares.
Highlights
- U.S. stocks retreated after May’s record-setting rally.
- The Dow fell 0.3%, while the S&P 500 and Nasdaq were near flat.
- Iran’s refusal to continue talks before Israel halts operations added geopolitical pressure.
- Nvidia’s new AI laptop chip helped offset weakness in technology shares.
Markets pause after May rally
The Dow Jones Industrial Average fell 0.3% in early trading, while the S&P 500 and Nasdaq Composite hovered near the flat line. The move followed a strong month on Wall Street: the Nasdaq climbed more than 8% in May, the S&P 500 gained roughly 5% and the Dow advanced nearly 3%.
All three major indexes had reached record highs at the end of May, supported by hopes for a U.S.-Iran deal and continued demand for AI-related stocks. On Friday the Dow rose 0.7%, while the S&P 500 and Nasdaq each added 0.2% as indexes touched new records.
Iran talks weigh on sentiment
According to CNBC, markets were unsettled by conflicting signals from the Middle East. Iran said it would not continue peace talks with the United States until Israel stops military operations in Lebanon and Gaza. The report also said Iran had threatened key shipping routes, including the Strait of Hormuz and Bab el-Mandeb.
President Donald Trump had earlier said he was reviewing a possible agreement that would extend a cease-fire, reopen shipping through the Strait of Hormuz and address Iran’s enriched uranium stockpile.
The uncertainty matters for markets because the Strait of Hormuz is a critical route for global energy shipments. Any delay in reopening or stabilizing the waterway risks keeping oil prices elevated and complicating the inflation outlook.
Nvidia limits tech weakness
Technology shares received some support from Nvidia’s announcements at Computex Taipei. The company unveiled its RTX Spark chip, designed to bring advanced AI capabilities to Windows laptops and desktops, with major PC makers expected to adopt the platform.
That helped keep the Nasdaq steadier than the Dow, even as broader market momentum cooled.
Geopolitics Tests the AI Trade
The market reaction shows that AI optimism remains powerful but not immune to energy and geopolitical shocks.
After May gains of more than 8% for the Nasdaq, about 5% for the S&P 500 and nearly 3% for the Dow, investors are now watching whether Middle East diplomacy can reduce oil risk without derailing the technology-led rally.
In an earlier report, we noted that U.S. stocks hit records as AI rally offsets oil risks.
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