Wall Street points to losses as pessimism over quick end to Iran war persists

As the war with Iran threatened to drag on, benchmark U.S. crude rose $3.43 to $101.50 a barrel. Brent crude, the international standard, climbed $3.62 to $107.83 a barrel.

U.S. President Donald Trump said the U.S.-Iran ceasefire was on “life support” after rejecting Iran’s latest peace proposal. That raises the stakes for Trump’s trip this week to China. China is the biggest buyer of Iran’s sanctioned crude oil.

The war has already sent the price for a barrel of Brent racing up 50% from prewar levels of roughly $70 and stoked inflation through the global economy. The war has shut the Strait of Hormuz and kept oil tankers stuck in the Persian Gulf instead of delivering crude to customers worldwide.

U.S. markets over the past couple of weeks had focused on big corporate profits and seemed to look past the war as earnings season rolled out. The strong performance suggested the U.S. economy was holding up even though households are being pressured by expensive gasoline and higher prices for goods due to new U.S. tariffs.

A new look at inflation in the U.S. arrives Tuesday in the form of consumer price data for April. That could give economists and investors insight into how much the Iran war is impacting Americans and what that might mean for the broader economy going forward.

Elsewhere, in Europe at midday, France's CAC 40 slipped 0.6%, while the German DAX dipped 1.1%. Britain's FTSE 100 shed 0.5%.

In Asia, Japan's benchmark Nikkei 225 added 0.5% to finish at 62,742.57. South Korea's Kospi dropped 2.3% to 7,643.15, in what analysts are categorizing as fallout from overreliance on fraying AI hopes.

“Global equities remain dangerously dependent on a tiny cluster of AI leaders, creating a rally structure that looks powerful on the surface but increasingly fragile underneath,” said Stephen Innes, analyst with SPI Asset Management.

He believes South Korea may be among the first major economies that will undergo what he called "the political redistribution phase of the AI boom.”

Australia's S&P/ASX 200 dipped 0.4% to 8,670.70. Hong Kong's Hang Seng lost earlier gains and fell 0.2% to 26,347.91, while the Shanghai Composite lost nearly 0.3% to 4,214.49.