Wall St declines as oil spikes after Trump rejects Iran peace proposal

The New York Stock Exchange witnessed a decline on Monday after President Donald Trump rejected an Iranian proposal for ending the conflict, causing crude prices to soar and reigniting inflation concerns. This led to an uptick in Treasury yields. Nvidia experienced a 2.1% gain due to its announcement of a $150 billion share repurchase authorization, the largest increase in share buybacks in history.

Iran proposed a peace deal at the United Nations General Assembly, which was relayed to the United States via Qatari mediators. Despite Trump's initial rejection of the offer, he later indicated that he expected US negotiators to continue talks this week. Crude prices surged by 3% to approximately $107-a-barrel, negatively impacting Treasury yields, which reached fresh multi-decade highs.

Art Hogan, chief market strategist at B. Riley Wealth, noted that energy prices have consistently propelled inflation, motivating the Federal Reserve to raise interest rates. The Dow Jones Industrial Average dropped 384.11 points, the S&P 500 declined by 64.36 points, and the Nasdaq Composite lost 268.66 points. Communication Services led sectoral declines, with Meta stock falling 4.3%.

Investors found some respite due to the conclusion of the Sino-US summit, which agreed to cut tariffs on $60 billion worth of goods and extend the trade truce for two months through January 10. As the week progressed, traders focused on crucial economic indicators, with a 70% probability that the Federal Reserve would hike interest rates by at least 25 basis points in back-to-back October meetings.

Concerns arose about the Fed's decision to hike earlier in September, as historical cases of the Fed raising rates during a supply shock have ended poorly. Policymakers Michelle Bowman, Lisa Cook, and Thomas Barkin were scheduled to speak later in the day, potentially reiterating the Fed's hawkish stance on monetary policy. Tesla experienced a 3.2% decline after J.P.

Morgan lowered its price target on the stock, citing weak deliveries in the third quarter. On the NYSE, declining issues outnumbered advancers by a ratio of 4.23-to-1, while on the Nasdaq, the ratio was 3.15-to-1. The S&P 500 reached three new 52-week highs and had 26 new lows, whereas the Nasdaq Composite recorded 26 new highs and 197 new lows.