US stocks: S&P 500, Dow tick lower as Middle East tensions unsettle investors

Published Mon, May 4, 2026 · 11:00 PM

THE benchmark S&P 500 and the blue-chip Dow edged down on Monday (May 4) as investors weighed heightened anxiety over the Middle East conflict against the optimism from last week’s earnings.

Conflicting reports about a US warship near the Strait of Hormuz dampened market sentiment in a turbulent start to the week.

Teheran said it had forced a US warship to turn back after it attempted to enter the Strait of Hormuz. Iran’s semi-official Fars news agency said two missiles had hit the warship, but the United States denied the report.

The confusion was enough for investors to pause following a strong run of earnings last week, as they assessed the aggressive rhetoric between Washington and Teheran and the risk of renewed escalation.

“I don’t believe that the markets have properly priced in the long-term risks that are going to come,” said Mark Malek, chief investment ​officer at Siebert Financial.

“There are going to be more shoes to drop. And you’re going to see it in future earnings,” he said, referring to the risk from higher oil prices.

The conflict, now in its third month, has continued to weigh on the global economy as oil prices stay elevated. Brent crude futures rose 2.2 per cent on Monday and are trading above US$110 a barrel.

At 9.42 am ET, the Dow Jones Industrial Average fell 230.93 points, or 0.47 per cent, to 49,268.34, the S&P 500 lost 6.48 points, or 0.09 per cent, to 7,223.64, and the Nasdaq Composite gained 26.87 points, or 0.11 per cent, to 25,141.31.

Nine of the 11 main S&P sectors were in the red, with the S&P 500 energy sector leading losses with a 0.7 per cent decline.

The CBOE Volatility Index, known as Wall Street’s “fear gauge”, was up 0.57 points at 17.56.

May is also historically the start of a weaker six-month stretch for stocks.

Since 1945 through April 2026, the S&P 500 has gained an average of about 2 per cent from May to October, according to data from Fidelity. That compares with an average gain of about 7 per cent from November through April.

“Seasonal patterns can offer useful historical perspective, but they aren’t always a reliable guide for what lies ahead,” said Adam Turnquist, chief technical strategist at LPL Financial.

“An easing of tensions in the Middle East and a pullback in oil prices could provide ongoing support for equities, especially if earnings remain resilient.”

Meanwhile, Berkshire Hathaway reported on Saturday that it was a net seller of stocks for the 14th consecutive quarter. The conglomerate, often viewed as a bellwether of the US economy, is closely watched for its insight into valuations and broader market conditions.

Separately, shares of GameStop dipped 2.4 per cent while eBay rose 5.5 per cent after the video game retailer unveiled a proposal to buy eBay for about US$56 billion in a cash-and-stock deal.

Shares of logistics firms FedEx and United Parcel Service fell 6.5 per cent and 7 per cent, respectively, after Amazon.com said on Monday it was rolling out “Amazon Supply Chain Services”, opening up its logistics network for other businesses to use.

Cruise operator Norwegian dropped 7.7 per cent after slashing its annual forecast due to higher fuel costs.

Declining issues outnumbered advancers by a 1.94-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and 13 new lows, while the Nasdaq Composite recorded 74 new highs and 31 new lows. REUTERS