WASHINGTON (dpa-AFX) - Following the substantial rally seen last week, stocks saw a modest pullback during trading on Monday. The major averages all moved to the downside, although selling pressure was relatively subdued.
The major averages finished the day well off their lows of the session but still in the red. The Nasdaq fell 64.09 points or 0.3 percent to 24,404.39, the S&P 500 dipped 16.92 points or 0.2 percent to 7,109.14 and the Dow edged down 4.87 points or less than a tenth of a percent to 49,442.56.
The modest weakness on Wall Street came amid concerns about the re-escalation of tensions between the U.S. and Iran following the latest developments in the Middle East.
Over the weekend, Iran once again closed the Strait of Hormuz and purportedly fired on tankers in the vital waterway, blaming the U.S. blockade of Iranian ports for the moves.
President Donald Trump called Iran's actions a 'total violation' of the ceasefire agreement between the U.S. and Iran, which is currently set to expire this week.
In a post on Truth Social, Trump also said he is sending representatives to Islamabad, Pakistan, for talks with Iran, although Tehran has denied there are plans for a second round of negotiations.
Trump once again threatened to knock out every single power plant and bridge in Iran if the country refuses to make a deal.
The latest threats combined with news that U.S. forces have seized an Iranian-flagged cargo ship in the Gulf of Oman, contributed to a significant rebound by the price of crude oil.
Some traders may also have been looking to cash in on last week's strong gains, although selling pressure remained relatively subdued amid persistent optimism about an eventual U.S.-Iran deal.
Sector News
Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.
Airline stocks saw considerable weakness, however, with the NYSE Arca Airline Index falling by 1.8 percent after soaring by 6.4 percent last Friday.
A pullback by the price of gold also weighed on gold stocks, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent.
Pharmaceutical and health care stocks also saw notable weakness on the day, while steel and banking stocks moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index climbed by 0.6 percent, while China's Shanghai Composite Index advanced by 0.8 percent.
Meanwhile, the major European markets moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.6 percent, the French CAC 40 Index and the German DAX Index slumped by 1.1 percent and 1.2 percent, respectively.
In the bond market, treasuries regained ground after an early pullback before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.250 percent after reaching a high of 4.274 percent.
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