Rising oil prices pushed U.S. stocks further away from Monday’s record highs and put more pressure on the U.S. bond market.
The S&P 500 fell 0.8%, giving up most of last week’s gains after hitting a record high. As of 11:45 a.m. ET, the Dow Jones Industrial Average was down 372 points, or 0.7%, and the Nasdaq was down 1%.
The most actively traded Brent crude oil contract rose 2.8% to $100.19 a barrel, while U.S. stocks were mostly lower. That overshadowed gains for Nvidia, Wall Street’s most powerful stock, after the company announced a historic cash transfer to investors through share buybacks.
Oil prices have been volatile amid uncertainty over when the war with Iran will allow tankers to once again freely pass through the Strait of Hormuz and deliver oil from the Middle East to customers around the world. The latest about-face comes after President Donald Trump said over the weekend that he rejected Iran’s offer to reopen the Strait of Hormuz and resume talks on its nuclear program.
“I want to make a deal, too,” Trump said on Saturday. “But this deal is unacceptable.”
Brent crude oil prices climbed above $101 a barrel before U.S. stocks opened on Monday morning, but gave up gains as U.S. officials said mediators were still working with Iran and the United States on a deal to end the fighting and open the strait.
Despite price ups and downs, a barrel of Brent crude oil remains well above the price of about $72 before the U.S. and Israel attacked Iran in late February. That’s fueled inflation, with the average price of a gallon of regular gas rising to nearly $4.48 from $3.13 a year ago, according to AAA.