Stock Market Reaches Record Highs Despite Iran Tensions and Oil Price Concerns
The S&P 500 and Nasdaq reached record highs Monday as investors balanced resilient economic data against ongoing geopolitical tensions from stalled Iran peace talks and oil supply disruptions. Goldman Sachs raised its year-end oil price forecast significantly due to sustained Persian Gulf disruptions.
Market Records
The broad market index added 0.12% and closed at a record level of 7,173.91. The Nasdaq Composite gained 0.20% and notched a closing record of 24,887.10. Both indexes also reached new all-time highs in the session. The Dow Jones Industrial Average fell 62.92 points, or 0.13%, to settle at 49,167.79.
Oil Price Forecasts
Goldman Sachs now expects oil prices to stay higher for longer, raising its Brent forecast to $90 a barrel by late 2026 from $80 previously, as disruptions in the Persian Gulf prove more persistent than earlier assumed. Goldman now expects Brent prices to average $90 per barrel in the fourth quarter, compared to $80 under the bank's previous forecast. It expects West Texas Intermediate to average $83 per barrel, compared to $75 prior.
International Markets
Japan's Nikkei 225 added 1.38% to close at a record high of 60,537.36, while South Korea's Kospi jumped 2.15% to end the trading day at 6,615.03, also scaling a new peak.
Fed Policy Outlook
Traders are currently pricing in a 100% chance that the Fed will leave rates unchanged at this week's meeting, with fed funds futures indicating policy is most likely to stay on hold for the rest of the year, according to the CME Fed Watch tool. The odds of a rate hike by the end of 2026 stood at 8%.