U.S. stocks ended lower on Monday as renewed tensions in the Middle East rattled investors and a competitive shift in the shipping industry weighed heavily on the broader market.
The Dow Jones Industrial Average fell by 557.37 points, or 1.13 percent, to 48,941.90. The Standard and Poor's 500 sank 29.37 points, or 0.41 percent, to 7,200.75. The Nasdaq Composite Index shed 46.64 points, or 0.19 percent, to 25,067.80.
Ten of the 11 primary Standard and Poor's 500 sectors ended in the red, with materials and industrials leading the laggards by losing 1.57 percent and 1.17 percent, respectively. Meanwhile, energy bucked the trend by rising 0.85 percent.
Markets slide into negative territory following reports that two Iranian strikes hit a U.S. patrol boat and a U.S. warship was forced to turn back in the Strait of Hormuz.
While the U.S. officially denied the reports from Iranian media outlets, geopolitical anxieties worsened after the United Arab Emirates (UAE) reported that both an oil tanker operated by the Abu Dhabi National Oil Company and the Fujairah export terminal had been struck.
On the macroeconomic front, U.S. factory orders for March came in higher than expected, largely spurred by soaring demand for electronic components that underpin artificial intelligence technology. According to data released by the Commercial Department on Monday, factory orders rose 1.5 percent for the month, marking the largest increase since November.
In corporate developments, the logistics sector emerged as a major sore spot after Amazon announced plans to open its proprietary freight, distribution, fulfillment, and parcel shipping network to outside businesses. The move sent shockwaves through the shipping industry, causing GXO Logistics to drop 17.7 percent, while UPS and FedEx declined 10.47 percent and 9.44 percent, respectively.
Looking ahead, Wall Street is bracing for a busy week of corporate earnings, highlighted by results from major semiconductor manufacturers such as Lattice Semiconductor, Advanced Micro Devices, and Arm Holdings. Investors are also closely anticipating reports from Palantir and Paramount Skydance later in the week.
U.S. stocks finish lower amid renewed Middle East tensions
U.S. stocks finish lower amid renewed Middle East tensions
Iran's Islamic Revolution Guard Corps (IRGC) on Monday unveiled a map outlining a new "area of control" in the Strait of Hormuz, a narrow waterway through which about a fifth of the world's oil passes, according to the state-run Islamic Republic of Iran Broadcasting (IRIB).
The zone extends from the southern Iranian coast near Kooh Mobarak to the United Arab Emirates (UAE) port city of Fujairah on the east, and westward to a line between Iran's Qeshm Island and the UAE emirate of Umm al-Quwain in the Persian Gulf.
IRGC spokesman Hossein Mohebi said that the announcement did not represent a change in the overall management of the waterway, according to a report by IRGC's Sepah News outlet. Commercial vessels following transit protocols set by the Guard Navy and coordinating with Iranian authorities along designated routes would be allowed safe passage, he said. Vessels violating those rules could be stopped by force, he warned.
The announcement came a day after U.S. President Donald Trump said the United States would help guide ships stranded in the strait out of restricted waters on Monday.
Iran’s Khatam al-Anbiya Central Headquaters -- the country's top military command -- responded by warning that any foreign forces, particularly U.S. troops, would be targeted if they attempted to enter or approach the strait, according to the official IRNA news agency.
Also on Monday, two missiles struck a U.S. Navy frigate in the strait after it ignored an Iranian warning, the semi-official Fars news agency reported. The vessel had been sailing near the port of Jask in what Iran described as a violation of maritime security rules. The frigate could not continue on its course after the strikes and withdrew from the area, the report said.
However, according to a subsequent report by Axios, a senior U.S. official denied that a U.S. ship was hit by Iranian missiles.
Brad Cooper, chief of U.S. Central Command, told a news conference on Monday the U.S. military had sunk six small Iranian boats in the Strait of Hormuz with air strikes from Apache and MH 60 Seahawk helicopters.
However, Iran's semi-official Tasnim news agency rejected U.S. claims of sinking Iranian boats.
Iran began tightening its grip on the strait on Feb. 28, restricting passage for vessels liked to Israel and the United States after the two countries launched joint strikes on Iranian territory. The United States later imposed its own blockade measures after post-cease-fire talks between the two countries in Islamabad on April 11-12 failed to produce an agreement.
Iran's IRGC unveils map of new "area of control" in Strait of Hormuz
