Wall Street began Monday’s session on a mixed footing as escalating tensions between the United States and Iran overshadowed continued strength in parts of the technology sector. The S&P 500 and Dow edged lower while the Nasdaq gained, reflecting a market balancing geopolitical risks against expectations for continued growth in artificial intelligence and related infrastructure.

Geopolitical Risk Weighs on Broader Sentiment

The S&P 500 fell 0.13%, while the Dow declined 0.37%, according to the Reuters market snapshot. Investor caution was linked to developments involving the United States and Iran, with a senior Iranian official warning that Tehran could escalate tensions in the Strait of Hormuz and the wider region if diplomacy fails.

The Strait of Hormuz remains strategically important to global energy markets, making any potential escalation a broader concern for investors beyond equities. Heightened geopolitical uncertainty can influence energy prices, inflation expectations and corporate costs, potentially complicating the outlook for financial markets even when economic fundamentals remain relatively resilient.

Technology Stocks Provide a Counterweight

Technology stocks offered some support to the market as investors responded to expectations of strong growth in artificial intelligence. The Nasdaq gained 0.12%, with data-storage companies and memory-chipmakers among the stronger performers.

The technology-sector resilience followed reports of a strong revenue forecast from AI company Anthropic. The development reinforced expectations that demand for AI infrastructure remains substantial, supporting companies involved in memory, data storage and other components required to expand computing capacity.

The divergence between the major indexes highlights the market’s current sensitivity to both macroeconomic and technological developments. While geopolitical concerns can pressure broad risk sentiment, continued corporate spending on AI infrastructure is providing a separate source of support for selected technology businesses.

Energy and Market Positioning Remain in Focus

Investors were also monitoring developments in energy markets because of the potential implications of tensions around the Strait of Hormuz. Any disruption to regional energy flows could affect crude prices and revive inflation concerns, creating another channel through which geopolitical developments could influence equity valuations and monetary-policy expectations.

Separately, U.S.-listed shares of Vista Energy gained after billionaire investor Peter Thiel disclosed a stake in the company, adding an individual stock-specific catalyst to an otherwise cautious session. The move illustrates how company-level developments can continue to drive significant trading activity even as broader markets remain sensitive to geopolitical headlines.

Going forward, investors will be watching the trajectory of U.S.-Iran relations, developments around the Strait of Hormuz and their potential effect on energy prices and inflation expectations. At the same time, the durability of AI-related demand will remain important for technology valuations, particularly as investors assess whether strong revenue expectations can translate into sustained earnings growth. The interaction between geopolitical risk, energy markets and AI investment is likely to remain a defining factor for market direction in the near term.