Wall Street Pauses as Geopolitical Risk Returns

All three major US indices ended marginally lower on Monday after tensions between the U.S. and Iran escalated. The S&P 500 slipped 0.24%, while the Dow Jones shed 4 points. The Nasdaq Composite lost 0.26%, breaking its longest positive streak since 1992.

Renewed U.S.-Iran hostilities  including Iran re-closing the Strait of Hormuz and the U.S. seizing an Iranian cargo vessel dampened investor risk appetite after last week’s record highs.

U.S. stock futures were little changed on Monday evening after Wall Street ended marginally lower, as investors remained cautious amid escalating U.S.-Iran tensions ahead of a looming ceasefire expiry.

Apple shares fell more than 1% after the closing bell following the company’s announcement that Tim Cook will step down as CEO and transition to executive chairman, with hardware engineering chief John Ternus named his successor, effective September 2026. The leadership change, unanimously approved by Apple’s board, came as a surprise to investors despite Cook overseeing a 1000% growth in the company’s market value during his tenure.

Kevin Warsh, President Trump’s nominee to lead the Federal Reserve, is set to appear before the Senate Banking Committee on Tuesday, with markets watching closely for his stance on near-term rate cuts. Swap markets currently price in roughly a 50% chance of a Fed rate reduction by year-end, a sharp recovery from near-zero odds during peak Iran hostilities.

Oil prices spiked yesterday, with WTI rising more than 5.6% to around $87 per barrel and Brent crude climbing above $95 per barrel, as Iran declared the Strait of Hormuz under strict control. WTI Crude is currently trading at $86.5, down 1% as Iran signals it may attend peace talks in Islamabad.

Asia-Pac stocks are trading higher, amid hopes for a resolution to the Middle East conflict, even as tensions between Iran and the U.S. continue to simmer.

The Indian trade delegation will travel to Washington this week, a step toward finalising the bilateral trade deal.

Nifty saw a sharp 160-point reversal from yesterday’s high, closing with a slim 11-point rise to 24,364. The fall from the higher levels appears to be largely profit booking after Nifty’s sharp 10% rally from the recent swing low of 22,182. The index continues to trade above its near-term averages, confirming the persistence of the broader uptrend. Support is seen around 24,100, while 24,571 may act as an immediate resistance zone in the days ahead.

Indian markets are poised to open modestly higher on hopes of the resumption of US-Iran peace talks in Islamabad.