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US STOCKS DIP AS MIDDLE EAST JITTERS OVERSHADOW EARNINGS

Wall Street pulled back from record highs on Monday after an explosion struck a South Korean merchant vessel in the Strait of Hormuz, underscoring Iran’s ability to disrupt Middle East oil supplies and tempering optimism fueled by strong first‑quarter earnings.

Energy stocks advanced as crude prices rose amid escalating tensions. The blast aboard the South Korean vessel appeared likely to reinforce concerns over shipping security in the region, despite U.S. President Donald Trump saying the U.S. Navy would ensure passage through the strait.

Tehran said it forced a U.S. warship to turn back after it attempted to enter the Strait of Hormuz, while the United Arab Emirates reported a fire at an oil installation following what it said was an Iranian drone attack.

Major U.S. stock indexes ended lower. The S&P 500 .SPX and Nasdaq .IXIC retreated modestly, while the Dow Jones Industrial Average .DJI fell more than 1%. The Cboe Volatility Index rose, reflecting increasing investor uncertainty.

Nearly all S&P 500 sectors closed in negative territory, with materials .SPLRCM falling about 1.6% to lead declines. Energy .SPNY was the only sector that finished higher, tracking gains in oil prices.

Beneath the surface, software and services stocks .SPLRCIS and biotechnology shares .NBI showed relative strength. In contrast, big banks .SPXBK, gold and silver miners .XAU, and transportation stocks were among the laggards.

The Dow Jones Transportation Average .DJT slumped nearly 5%, with all 20 components ending lower. Parcel delivery and trucking companies, including FedEx FDX.N and C.H. Robinson CHRW.O, were among the steepest decliners after Amazon.com AMZN.O opened its logistics network to outside customers. AMZN shares posted a record closing high.

Meanwhile, the U.S. 10-year Treasury yield US10YT=RR hit 4.464%, its highest level since March 27.

Here is a snapshot of where markets stood shortly after 4 p.m. EDT.

(Terence Gabriel)

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