Wall Street slips as renewed US-Iran strikes push crude oil higher, energy and chip stocks rise

US stocks slipped on Monday as renewed military strikes between the United States and Iran sent crude oil prices higher, reviving concerns that rising energy costs could add to inflationary pressures.

As of 1:20 p.m. Eastern Time, the S&P 500 index fell 0.5%. The Dow Jones Industrial Average fell 0.6%, and the Nasdaq fell 0.4%

At 09:54 a.m. the Dow Jones Industrial Average fell 350.75 points, or 0.65%, to 53,209.24, the S&P 500 shed 30.49 points, or 0.40%, to 7,681.27, and the Nasdaq Composite lost 77.11 points, or 0.29%, to 26,325.31.

At the open, the Dow Jones Industrial Average fell 97.4 points, or 0.18%, to 53,462.6. The S&P 500 fell 14.2 points, or 0.18%, to 7,697.52​, while the Nasdaq Composite dropped 43.9 points, or 0.17%, to 26,358.559.

Iran launched attacks on US military positions in the Middle East in retaliation for American strikes on an island in the Strait of Hormuz. The escalation raised concerns that the two countries could once again be heading towards a broader military confrontation.

Oil prices climbed more than 2% after the US and Iran exchanged fire for the first time in more than a month, adding to uncertainty for investors already monitoring inflation and interest-rate risks.

G20 finance leaders meet amid tensions

US efforts to step up pressure on Iran were expected to feature prominently as finance ministers and other economic leaders from the Group of 20 major economies gathered for talks in North Carolina.

The meeting comes as global markets assess the potential economic fallout from renewed tensions in the Middle East, particularly the risk of higher energy prices and their impact on inflation.

Jobs report in focus

Apart from developments surrounding the G20 meeting and US-Iran tensions, investors are also preparing for the release of key US employment data on Friday.

The jobs report could provide fresh clues about the health of the US economy and influence expectations around the Federal Reserve’s future monetary policy decisions.

"With higher oil prices, with a rise in the 10-year yield, and also investors knowing that September is traditionally not a good month for the market, that possibly we are seeing some profit-taking at this point ahead of what could be an otherwise choppy week," said CFRA Research's Sam Stovall.

Key Stock Movers

Energy stocks jumped following rise in crude prices, with Halliburton and Valero Energy climbing 4.26% and 1.90%, respectively.

Chipmakers gained with Nvidia shares rising 0.28%, Intel and Texas Instruments gaining 1.21% and 0.9%, respectively.

GameStop stock climbed 4.5% after the videogame company said it would pay about 27% of a previously announced $1.4 billion debt exchange through cash on hand instead of issuing new stock.

Bullion

Gold prices remained largely unchanged on Monday as renewed military strikes in the Middle East fuelled inflation concerns, while hawkish remarks from Federal Reserve Chair Kevin Warsh strengthened expectations of a possible interest-rate hike in September.

By 1210 GMT, spot gold was little changed at $4,455.19 per ounce. US gold futures for December delivery dropped 0.5% to $4,506.60.

Among other metals, spot silver rose 1.4% to $67.28 per ounce, platinum slipped 0.7% to $1,807.50, and palladium slid 1.4% to $1,402.