US stocks retreat as oil jumps on Hormuz pessimism

On Monday, US stocks fell as oil prices surged due to concerns over the Strait of Hormuz. Intel and other chipmakers experienced declines, contributing to the market's downturn. US President Donald Trump insisted that Iran compensate for the lives lost in conflicts, while Iran demanded that Washington meet conditions, such as compensating Tehran for damages resulting from US and Israeli strikes on its territory.

As investors lost confidence in resolving the Middle East crisis, crude oil prices rose by about 5 percent to reach $82.13 per barrel. Reopening the Strait of Hormuz might alleviate worries about rising energy prices, which have fueled inflation concerns and raised the possibility of central banks raising interest rates. Intel's stock dropped 4.1 percent after the company announced plans to raise $15 billion through a share sale.

The S&P 500 reached a new record high on Friday, buoyed by stronger-than-expected earnings, but the Iran conflict dampened risk sentiment and pulled the index down. Tom Hainlin, an investment strategist at US Bank Wealth Management, noted that the conflict has introduced uncertainty into energy prices, which have remained elevated since the conflict began in February.

The market remains uncertain about how the situation will unfold, but the premium on oil prices is likely to persist. Nvidia's stock dipped 2.9 percent, and a group of financial firms, including Apollo Global and Blackstone, is reportedly working with Nvidia to create a $500 billion funding package for AI infrastructure. The S&P 500 closed the day at 7,753 points, the Nasdaq at 26,605 points, and the Dow Jones Industrial Average at 53,976 points.