The S&P 500 (^GSPC) opened the week lower as oil prices spiked on renewed Iran tensions, with index futures slipping 0.1% after conflicting reports about a U.S. warship near the Strait of Hormuz. WTI crude futures jumped 3% to trade above $105 per barrel, and Brent climbed 3% to above $111, pulling capital into energy names. Futures recovered once the Pentagon disputed the Iranian account. After last week’s record setting performance, the S&P 500 (^GSPC) remains above the 7,200 threshold despite today’s modest pullback.
The trigger is the Strait of Hormuz. WTI crude is trading near $103, up about 1%, while Brent has pushed to roughly $110, up 2%. That follows a volatile April in which WTI swung from $85.91 on April 17 to a peak of $114.58 on April 7 before settling near $99.89 to close the month. Conflicting reports of an Iranian missile strike on a U.S. warship, since denied by U.S. Central Command, have reintroduced a war premium.
Winners and Losers Diverge
The story underneath the index is rotation. Alphabet, Amazon, Meta and Microsoft together account for more than a fifth of the S&P 500’s market value, and last week’s reactions were brutally selective: Alphabet jumped 10% on AI ad monetization and a $460 billion cloud backlog, while Meta sank almost 9%, Microsoft fell 4%, and Amazon barely budged. Investors are paying for proof of returns over promises.
Energy is the clear beneficiary. RBC reiterated a Buy on ConocoPhillips with a $152 target, and ExxonMobil posted Q1 adjusted EPS of $1.16 on $83.16 billion in revenue. Pain is showing up in fuel-sensitive names: Norwegian Cruise Line dropped 5.5% premarket after guiding well below expectations, citing Middle East disruption directly.
Merger Monday Deja Vu
GameStop (NYSE:GME) disclosed an unsolicited bid for eBay (NASDAQ:EBAY) at $125 per share in cash and stock, valuing the platform at roughly $56 billion. eBay shares jumped as much as 13% in after-hours trading to around $118, still below the offer, signaling deal risk. CEO Ryan Cohen told CNBC talks with eBay’s management team have not yet occurred.
What It Means for Investors
The macro backdrop is fragile. University of Michigan consumer sentiment sits at 53.3, deep in recessionary territory, and the 10-year Treasury yield is back at 4.40%. The VIX is almost 17, calm by historical standards, suggests options markets see today’s wobble as a headline event rather than a regime shift. Small caps confirm the cautious tone: the Russell 2000 proxy is up 13% year to date, but they tend to crack first when oil-driven inflation fears return.
What to Watch This Week
Two catalysts matter. Friday’s April jobs report is expected to show 60,000 new positions, down from 178,000 in March, and semiconductor earnings from AMD, Arm and Lattice will test whether the AI trade can sustain the index while geopolitics weigh on everything else.
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