Oil prices tumbled more than 7% on Monday as investors bet that U.S.-Iran talks in Qatar could end the threat to Gulf shipping, while technology stocks fell for a third straight session and left Wall Street’s close split.
The benchmark S&P 500 fell 0.5% to 7,541.40, the Nasdaq Composite dropped 1.1% to 25,164.32, and the Dow Jones Industrial Average added 0.4% to close at 51,983.98.
West Texas Intermediate crude settled at $96.46 a barrel, down $7.66, or 7.4% — its biggest one-day drop since May 20. Brent crude fell about 7.6% to around $104.77 a barrel.
Diplomacy hopes drove the move
Indirect talks between the United States and Iran in Doha entered a third day, with Qatari mediators traveling to Tehran to meet Iranian Foreign Minister Abbas Araghchi, according to reports from the negotiations. Iranian President Masoud Pezeshkian said his government was working to resolve issues through dialogue, and President Trump hinted at progress. Iran’s account was more cautious, with Araghchi saying consultations were proceeding through Qatari and Pakistani mediators.
Markets did not wait for a deal. The S&P 500 energy index fell 4%, in line with the move lower in oil prices.
Tech weakness, yields fall
Chip stocks stayed under pressure: the Philadelphia Semiconductor Index fell nearly 4%, with Intel down about 8.8% and AMD down about 7.5%. Data showed the Nasdaq-100 has now fallen more than 10% from its October high, entering technical-correction territory.
The yield on the 10-year Treasury note slipped to around 4.89%, its lowest since early September and down about 40 basis points from its 52-week high of 5.664% on Oct. 5. Gold rose about 1.8% to roughly $3,957 an ounce, rebounding from a one-year low.
What it means for your money
Cheaper oil should eventually mean lower gasoline prices if the decline holds, and lower energy costs take pressure off inflation — which in turn gives the Federal Reserve more room. Markets still expect the Fed to raise rates in December after it held rates at 3.75% to 4% last week, but the odds slipped to about 77%.
Lower Treasury yields, if they stick, ease borrowing costs on mortgages and other loans. The rebound in gold reflects investors hedging ahead of Tuesday’s midterm elections and Friday’s jobs report.
Sources: Investopedia; eOption market recap; Market Briefer (citing Reuters market-close report); The Motley Fool.
