Wall Street closes slightly down on renewed tensions between US, Iran

NEW YORK, April 20 (Reuters) – U.S. stocks closed slightly lower on Monday, with each of the three major indexes coming off a third straight week of gains, as renewed U.S.-Iran tensions put the durability of a two-week ceasefire in question.

Iran is considering attending peace talks with the U.S. in Pakistan, a senior Iranian official told Reuters, following moves by Islamabad to end a U.S. blockade of Iran’s ports.

However, a separate source said Vice President JD Vance was still in the U.S., denying reports he was on his way to Pakistan for talks.

Iran opened the Strait of Hormuz on Friday, fueling a broad market surge, with the S&P 500 and the Nasdaq posting record highs for a third straight session for their biggest weekly gains in 11 months. However, Tehran closed the crucial shipping waterway again over the weekend.

U.S. crude jumped 6.87% to settle at $89.61 a barrel and Brent rose to settle at $95.48 per barrel, up 5.64% on the day, lifting the S&P 500 energy index 0.21%.

“The news over the weekend with the re-closure of the strait or the boarding of the Iran vessel, that gets us a little away from it’s fully reopened, but the timing doesn’t look like it’s still that far off as it was with at least talks over the week,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis.

“But you’re in the middle of first-quarter earnings season too, so then the question is, has there been any bleed over into the real economy, and so far you’ve heard from the banks that consumer credit looks okay and their spending looks okay.”

The Dow Jones Industrial Average shed 4.87 points, or 0.01%, to 49,442.56, the S&P 500 lost 16.92 points, or 0.24%, to 7,109.14 and the Nasdaq Composite declined 64.09 points, or 0.26%, to 24,404.39.

Communication services was the worst-performing sector, as Meta was down 2.56% to snap a nine-session winning streak, its longest since October.

Netflix fell 2.55% to also weigh on the sector, and has fallen about 12% since announcing its quarterly results and the departure of co-founder Reed Hastings last week.

The CBOE Volatility Index, known as Wall Street‘s “fear gauge”, gained after falling for the past eight sessions and was last up 1.37 points at 18.85, after reaching a one-week high of 19.99.

Investors will look to assess the impact of the Iran war on corporate earnings and on the broader economy, with companies including Lockheed Martin and IBM scheduled to report later this week.

Tesla will kick off results from the so-called “Magnificent Seven” group of megacap stocks on Wednesday.

Of the 48 S&P 500 companies that have reported earnings through Friday morning, 87.5% have topped analyst expectations, according to LSEG data. The current first-quarter earnings growth rate stands at 14.4%.

Among other movers, QXO shares lost 3.12% after the construction supplies distributor struck a $17 billion deal to acquire building products distributor and installer TopBuild, whose shares surged 19.38%.

Advancing issues outnumbered decliners by a 1.08-to-1 ratio on the NYSE, but declining issues outnumbered advancers by a 1.01-to-1 ratio on the Nasdaq.

The S&P 500 posted 44 new 52-week highs and no new lows while the Nasdaq Composite recorded 173 new highs and 42 new lows.

Volume on U.S. exchanges was 16.42 billion shares, compared with the 18.54 billion average for the full session over the last 20 trading days.

(Reporting by Chuck Mikolajczak; additional reporting by Purvi Agarwal and Avinash P in Bengaluru; Editing by Anil D’Silva, Tasim Zahid and Devika Syamnath and David Gregorio)