Wall Street traded on mixed footing Monday as rising tensions between the United States and Iran offset strength across parts of the technology sector. The S&P 500 fell 0.13% and the Dow declined 0.37%, while the Nasdaq gained 0.12%, reflecting a market balancing geopolitical uncertainty against continued optimism surrounding artificial intelligence infrastructure.

Geopolitical Risk Weighs on Major Indexes

Investor sentiment was pressured by renewed uncertainty surrounding U.S.-Iran relations. A senior Iranian official told Reuters that Tehran could escalate tensions in the Strait of Hormuz and the wider region if diplomacy with Washington fails, signaling a potentially more confrontational approach to the conflict.

The Strait of Hormuz is strategically important to global energy markets, making any escalation a concern for investors beyond equities. Prolonged disruption could affect crude supply and transportation, potentially pushing energy prices higher and complicating inflation expectations across major economies.

AI Strength Keeps Technology Stocks Resilient

Technology shares provided a counterweight to the broader weakness. Data-storage companies and memory-chipmakers outperformed as investors responded to continued expectations for strong artificial intelligence demand. The sector’s resilience followed reports of a strong revenue forecast from AI company Anthropic.

The move underscores the growing importance of AI infrastructure spending to technology valuations. Demand for computing capacity, memory and data-storage infrastructure remains a major theme across the sector, allowing selected technology companies to outperform even as geopolitical concerns weigh on broader risk appetite.

Energy Markets Add Another Layer of Risk

The interaction between geopolitical developments and energy markets remains particularly important for global investors. A sustained increase in crude prices could feed into transportation and production costs, potentially slowing the improvement in inflation and influencing expectations for central-bank policy.

At the individual-company level, U.S. shares of Vista Energy gained after investor Peter Thiel acquired a stake, providing a separate catalyst in the energy sector. The move illustrates how company-specific developments can continue to influence individual stocks even while macroeconomic and geopolitical risks dominate broader market positioning.

Looking ahead, investors will closely monitor developments between Washington and Tehran, particularly any changes affecting the Strait of Hormuz and global energy flows. At the same time, the durability of AI-related demand will remain critical for technology stocks, leaving markets exposed to two competing forces: geopolitical and energy risks on one side, and strong corporate investment in artificial intelligence on the other.