US Stocks Slip as Investors Prepare for Key Earnings Amid Uncertainty in US-Iran Diplomatic Negotiations

U.S. Stock Indices Edge Down Amid Diplomatic Stalemate and Fed Meeting

Major U.S. stock indices edged down on Monday morning as diplomatic efforts between Washington and Tehran reached a stalemate. Investors are treading cautiously ahead of a dense week of corporate earnings and the latest policy update from the Federal Reserve.

At 10:10 a.m. ET, the Dow Jones Industrial Average fell 25.18 points, or 0.05%, to 49,205.53, the S&P 500 lost 5.16 points, or 0.07%, to 7,159.92, and the Nasdaq Composite lost 67.96 points, or 0.27%, to 24,762.66. At the open, the Dow Jones Industrial Average fell 118.5 points, or 0.24%, to 49,112.2, while the S&P 500 fell 12.4 points, or 0.17%, to 7,152.72, and the Nasdaq Composite dropped 37.0 points, or 0.15%, to 24,799.63.

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Energy markets reacted sharply to the weekend's events after President Donald Trump canceled US envoys' trip for peace talks, stating there was little progress to be made. Crude oil prices jumped over 2%, with Brent crude climbing above $108 per barrel. While energy costs have fueled inflationary concerns, US equities have managed to hover near record highs, supported by a persistent rally in artificial intelligence and technology stocks.

The Federal Reserve will begin its two-day meeting on Tuesday, with a decision expected on Wednesday. The central bank is widely expected to hold the benchmark rate. This meeting could be the final session led by Chair Jerome Powell, whose term expires on May 15, 2026. The Senate is currently considering Kevin Warsh, President Trump's nominee, to succeed him.

Wall Street is bracing for a "make-or-break" week for the current market rally as five of the "Magnificent Seven" tech giants will report their quarterly results. Investors are awaiting updates from Apple, Meta Platforms, Alphabet (Google), Microsoft, and Amazon. The reporting schedule also includes heavyweights like General Motors, Ford, ExxonMobil, and Coca-Cola.

Corporate earnings have been "really good so far," according to CFRA Research's Sam Stovall. People believe that something else is even more encouraging to offset this worry about oil prices, Stovall added.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Key stock movers include Qualcomm, whose stock surged 2.2% after an analyst said OpenAI was working with the chip designer and Taiwan's MediaTek to develop smartphone processors. Nvidia shares rose 0.6% after jumping 4.3% in the previous session. Microsoft shares slipped 1.2% after OpenAI said on Monday that the cloud computing provider will not have exclusive access to its AI models and products. Domino's Pizza stock tumbled 10.3% after the firm missed first quarter sales estimates.