The Nasdaq and S&P 500 closed lower on Monday, with declines in Intel and other chipmakers, as investors became less confident about a deal to reopen the Strait of Hormuz.

US President Donald Trump demanded that Iran pay compensation for the people he said it had killed in wars, attacks and protests. Earlier, Iran called for Washington to meet conditions, including recompensing Tehran for the damage caused since the US and Israel launched strikes on its territory more than five months ago.

With investors less optimistic about a resolution of the Middle East crisis, US crude oil jumped about 5 percent to settle at US$82.13 a barrel. Reopening the flow of oil through the Strait could mitigate concerns over heightened energy prices that have spurred inflation worries and led to concerns that central banks would have to raise interest rates.

Also weighing on the market were shares of Intel, which fell 4.1 percent after the chipmaker said it was planning to raise US$15 billion through a share sale.

The S&P 500 notched a record-high close on Friday, helped by much stronger than expected earnings results.

"It's record margins and record earnings. That's just been the story of this market, and yet the overlay of the Iran conflict just pulls risk sentiment on and then pulls it off," said Tom Hainlin, an investment strategist at US ⁠Bank Wealth Management in Minneapolis.

"The direct impact is just the energy sector and ... oil prices, and they're just sticky here above where they were on February 27 before the conflict. So there's clearly no transparency of the path to get back to where we were before the conflict started, and so that premium's just being built in. So far, the world's been able to work around it, but those workarounds don't last forever."

Shares of Nvidia dropped 2.9 percent. A person familiar with the matter told Reuters on Monday that a group of financial firms, including Apollo Global and Blackstone, is working with Nvidia to put together a US$500 billion funding package for AI infrastructure development.

The S&P 500 declined 0.1 percent to end the session at 7,753 points. The Nasdaq declined 0.3 percent to 26,605 points, while the Dow Jones Industrial Average declined 0.1 percent to 53,976 points. (Reuters)




Edited by Cecil Wong