Wall Street stocks retreated Monday as US Treasury yields continued to climb after US President Donald Trump rejected Iran's offer of a seven-day truce.
Oil prices also rose, although crude finished well below session highs as traders were heartened that Trump also signaled he expects talks to continue.
Markets also digested a report from Iranian state media that Iran's Foreign Minister Abbas Araghchi was set to meet on Monday with Qatari mediators in New York.
Wall Street indices spent the entire session in the red, with the broad-based S&P 500 closing down 0.8 precent.
"The ongoing Washington and Tehran impasse is roiling markets to start the week, as yields soar further into the nosebleeds," said Jose Torres of Interactive Brokers. "The geopolitical premium bolstering oil prices is worrying Wall Street that the Fed will meaningfully tighten monetary policy to constrain inflation."
Saudi Foreign Minister Prince Faisal bin Farhan and US Secretary of State Marco Rubio underscored the need to safeguard maritime security and freedom of navigation through the Strait of Hormuz and Bab al-Mandab during talks in Washington on Monday, the Saudi Foreign Ministry said.
The ministers reviewed strategic ties and discussed regional developments, including the escalating conflict in Yemen, where Houthi forces have intensified attacks on Saudi territory and shipping lanes, according to Saudi and international reports.
Both sides reaffirmed support for diplomatic efforts to resolve regional crises and ensure the flow of global trade, the ministry added.
US Treasury Secretary Scott Bessent pressed Lebanon’s leadership to take “proactive steps” to dismantle Iranian and Hezbollah financial networks during a Monday meeting in Washington with Prime Minister Nawaf Salam and Finance Minister Yassine Jaber, according to a Treasury readout.
Bessent also underscored the need for swift financial-sector reforms to restore confidence in Lebanon’s battered banking system, as Beirut seeks to revive negotiations with the International Monetary Fund and secure World Bank support.
Salam highlighted progress on banking reforms and asked for US help in IMF talks and broader economic recovery, the prime minister’s office said.
President Donald Trump said that US officials had spoken with mediators involved in indirect talks with Iran, as Washington and Tehran weigh further diplomacy amid the war. Speaking to reporters in the Oval Office, Trump said, “We’re going to win. As far as I’m concerned, it’s going to be one way or the other. It’s going to go pretty quickly.”
The remarks came as Qatari mediators held separate meetings with Iranian Foreign Minister Abbas Araghchi in New York and with US envoys, discussing proposals to reopen the Strait of Hormuz and address nuclear concerns. Trump has rejected Tehran’s latest truce plan but signaled talks could resume soon.
Iran’s state-run IRNA news agency reported late on Monday that residents on Qeshm Island heard an explosion-like sound coming from the direction of the sea, with no apparent impact on the island. State TV later cited local sources as saying no strikes or explosions had occurred on Qeshm, describing the noise as similar to previous nights and likely warning shots at vessels violating waterway rules. Reuters and other outlets recast earlier reports, noting there was no immediate independent confirmation of the sound’s cause.
An unnamed Iranian official denied reports that Tehran had shown "flexibility" on its nuclear position, telling state-run Press TV via Telegram on Monday that no discussions were underway on the issue.
The official said the US was “trapped” over the Strait of Hormuz and was raising the nuclear file to divert attention, adding that Iran’s nuclear stance had not changed.
The remarks contradict a US official’s account to CNN that Iran had signaled nuclear flexibility and that Washington was holding “positive and constructive discussions” through mediators, with President Donald Trump open to sanctions relief and releasing frozen funds if Tehran made “concrete progress.”
Donald Trump on Monday denied asking Xi Jinping if he would like to buy American weapons, after the US ambassador to Beijing said the US president made the offer to his Chinese counterpart.
"I've never heard of that one," Trump told reporters in the Oval Office when asked about the comments made by envoy David Purdue.
"They'd probably like to buy it because we do make better equipment than them, so maybe it's a good idea. But we didn't discuss it."
