Wall Street closed mixed on Monday, pulled down by further widening of the Iran conflict. Investors remained cautious as the escalating Iran war drove oil prices higher and heightened inflation fears, compounding uncertainty over Fed policy. Two of the three benchmark indexes ended in the red, while one ended in green.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.1%, or 49.5 points, to close at 45,216.14. Twenty components of the 30-stock index ended in positive territory, while 10 ended in the negative.

The tech-heavy Nasdaq Composite lost 153.72 points, or 0.7%, to close at 20,794.64.

The S&P 500 fell 25.13 points, or 0.4%, to close at 6,343.72. Three of the 11 broad sectors of the benchmark index closed in the red. The Industrials Select Sector SPDR (XLI), the Technology Select Sector SPDR (XLK) and the Energy Select Sector SPDR (XLE) declined 1.6%, 1.5%, 0.9% respectively, while the Financials Select Sector SPDR (XLF) advanced 1.1%.

The fear gauge CBOE Volatility Index (VIX) decreased 1.4% to 30.61. A total of 18.85 billion shares were traded on Monday, lower than the last 20-session average of 20 billion. Decliners outnumbered advancers by a 1.14-to-1 ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq Composite.

Oil Rally Intensifies as Iran War Escalates

Oil prices closed higher on Monday, with Brent crude heading for a record monthly surge as geopolitical tensions sharply intensified. The rally was driven by the widening Iran war, which has disrupted key energy supply routes and injected significant uncertainty into global markets.

WTI crude settled above $100 per barrel for the first time since 2022, reflecting growing fears of supply shortages. The situation escalated further after Yemeni Houthi forces launched their first attacks on Israel, broadening the conflict and raising concerns over the security of critical shipping lanes. The expanding conflict has added a substantial risk premium to oil prices, pushing Brent toward its largest-ever monthly gain, with increases nearing 60% in March alone. Continued escalation could keep prices elevated, intensify global inflationary pressures and weigh heavily on economic growth and financial markets worldwide.

Brent crude edged up 0.2% to settle at $112.78 after surging more than $4 intraday to $116.89, while WTI crude jumped 3.3% to $102.88, its highest level since July 2022.

Semiconductor Stocks Plunge on Wall Street

Semiconductor stocks slumped sharply on Monday, as escalating Iran war tensions and surging oil prices sparked a broad risk-off mood. The PHLX Semiconductor Sector Index (SOX) tumbled 4.2%, reflecting heavy selling across the sector. Rising energy costs fueled inflation concerns and threatened margins, while ongoing geopolitical uncertainty raised fears of supply chain disruptions.

Major chipmakers declined notably, as investors pulled back from high-growth tech. The downturn was exacerbated by rising Treasury yields and persistent uncertainty over Fed policy, intensifying the sector-wide sell-off. Consequently, shares of Broadcom Inc. (AVGO Quick QuoteAVGO - Free Report) and Advanced Micro Devices, Inc. (AMD Quick QuoteAMD - Free Report) lost 2.4% and 3%, respectively. While AVGO sports a Zacks Rank #1 (Strong Buy), AMD has a #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.

Powell’s Cautious Tone Eases Investor Concerns

Remarks from Jerome Powell offered support to equities, as he emphasized that long-term inflation expectations remain anchored despite the energy shock. He also indicated the Fed is not rushing into policy action, easing investor concerns.

No economic data was released on Monday.