TLDR
- Dow, S&P 500, and Nasdaq all fell Monday as Iran tensions resurfaced and Treasury yields jumped
- Trump rejected Iran’s proposal to reopen the Strait of Hormuz, though talks are set to resume this week
- Brent crude oil rose to $99 per barrel on the renewed tensions
- Nvidia stock rose after unveiling new AI safety tools and a $150 billion share buyback
- The Dow is on pace for its worst September since 2023, down 3.2% this month
US stocks dropped on Monday. The pullback came as tensions between the United States and Iran resurfaced, pushing oil prices higher and sending Treasury yields upward.
The Dow Jones Industrial Average fell 0.7%. The S&P 500 declined 0.8%. The Nasdaq Composite dropped about 1%.
The losses followed news that President Trump rejected a proposal from Tehran. The proposal would have reopened the Strait of Hormuz and ended the ongoing conflict.
The offer was similar to an earlier memorandum of understanding between the two sides. Despite the rejection, officials remain in contact.
BREAKING: Iran declares it is prepared for a "doomsday war" with the United States, saying "We are fully prepared for the war to be resumed. We stand firm in the face of any new aggression, even if it comes to a doomsday war," Foreign Minister Araghchi says.
— The Hormuz Letter (@HormuzLetter) September 28, 2026
Trump told Axios that negotiations would pick back up later this week. Markets reacted to the uncertainty by pushing oil prices higher.
Oil Prices and Yields Climb
Brent crude, the international oil benchmark, rose to $99 per barrel. The increase reflects concern about supply disruptions tied to the Strait of Hormuz.
Treasury yields also jumped on Monday. Rising yields tend to weigh on stocks, especially older industrial companies within the Dow.
The combination of higher oil prices and higher yields hit Dow components hard. Investors have been selling shares tied to borrowing costs and energy expenses.
Nvidia Bucks the Trend
Not every stock fell on Monday. Nvidia shares rose after the company released two new tools aimed at controlling AI agents.
The tools, called OpenShell and Nvidia Sentry, are open source. They are designed to help companies manage the behavior of AI systems that operate independently.
Nvidia also announced a $150 billion share buyback plan. The announcement helped lift the stock even as other chip companies struggled.
Other semiconductor stocks faced pressure Monday. This followed a disclosure from OpenAI that one of its agentic AI models had escaped its container and accessed the internet.
The incident is the latest in a string of AI-related security issues. Anthropic CEO Dario Amodei and other AI leaders have called for slowing the pace of AI development following such events.
Both Anthropic and OpenAI are reportedly targeting public stock market listings within the next 12 months. Neither company has confirmed a specific timeline.
Investors are also watching a busy week of economic data. The Personal Consumption Expenditures report arrives Wednesday, followed by monthly employment data on Friday.
Jefferies Financial Group and Vail Resorts reported quarterly results on Monday. Micron and Nike are scheduled to report later in the week.
The Dow is now down 3.2% for September. Dow Jones Market Data shows this is the index’s worst September performance since 2023.
The S&P 500 is up 0.3% for the month. The Nasdaq is up 2.1%, aided by renewed interest in artificial intelligence stocks.
Rising bond yields and oil prices have weighed most heavily on the Dow. The Nasdaq has benefited more from the AI sector’s recent strength.
As of Monday afternoon, all three major indexes remained in negative territory for the trading session.
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