MARKET SNAPSHOT

Major U.S. stock indexes ended narrowly mixed, trimming initial sharp declines as traders weighed the potential fallout from the U.S.'s weekend strikes in Iran. Oil prices surged after the strikes on Iran showed signs of sparking a widening conflict across the Middle East. Treasury yields rose and the U.S. dollar strengthened. Gold futures settled higher after paring back from an initial surge.

MARKET WRAPS

EQUITIES

Major U.S. stock indexes ended narrowly mixed on Monday.

Stocks fell sharply at the open, only to quickly pare losses.The Dow Jones Industrial Average ended 0.2% lower, while the Nasdaq composite rose 0.4%. The S&P 500 finished up less than 0.1%.

Energy stocks rallied along with crude oil prices on worries about supply disruptions.

Consumer discretionary was the worst performing sector led by declines on cruise operators Norwegian and Carnival.

Defense stocks rallied, with Lockheed Martin, RTX and Northrop Grumman gaining between 3%-6%.

European and Asian stocks largely sold off on Monday, with airlines posting particularly sharp losses.

China's benchmark Shanghai Composite Index rose 0.5%, the Shenzhen Composite Index fell 0.7%, and the ChiNext Price Index declined 0.5%.

Hong Kong's Hang Seng Index dropped 2.1%.

Japan's Nikkei Stock Average fell 1.3%.

Australia's S&P/ASX 200 Benchmark Index ended flat.

New Zealand's S&P/NZX 50 Index fell 0.5%.

COMMODITIES

Crude futures rose as the armed conflict in the Middle East prompted shippers to avoid transit through the strategic Strait of Hormuz, but settled well off earlier highs.

"Apparently, the market feels the end game is sooner rather than later, with WTI threatening to trade to levels below $70, and Brent down over $5 since posting the one-year plus high of $82.37 on the open on Sunday night," said Mizuho's Robert Yawger.

Oil production hasn't been shut in, but tanker traffic in the Persian Gulf has been halted as a precaution, he said. "The longer the Strait of Hormuz is effectively closed to shipping, the more likely oil prices will tick higher."

WTI settled up 6.3% at $71.23 a barrel, and Brent rose 6.7% to $77.74 a barrel.

Gold futures settled higher after paring back from an initial 3% jump following the U.S.-Israel attacks on Iran and the fallout.

The front-month contract finished up 1.2% to $5,294.40 a troy ounce--the third-highest close in the front-month contract's history.

How much upside depends on how the conflict in Iran develops, said Rhona O'Connell of StoneX. If the situation cools down, then gold prices may relax, but they're historically high, said O'Connell.

"Gold and silver may have done enough for now and need to unwind overbought conditions, but the downside remains limited," she said.

TODAY'S TOP HEADLINES

Trump leaves door open for extended U.S. campaign against Iran. What that could mean for the economy.

President Donald Trump is leaving the door open for an extended military campaign against Iran, saying the U.S. has the capability to go beyond its initial estimate of the operation.

"From the beginning, we projected four to five weeks, but we have capability to go far longer than that," Trump said Monday at a White House ceremony. He said the operation was "ahead of schedule."

An extended campaign could put pressure on the U.S. economy through inflation as a result of higher oil prices. A quicker operation could have less impact on markets.

U.S. Factory Activity Continued to Expand in February

U.S. factory activity expanded in February for the second straight month as new orders and production continued to grow, a survey of manufacturing firms said.

The Institute for Supply Management said Monday that its purchasing managers' index of manufacturing activity was 52.4 in February compared with 52.6 in January. A consensus of economists polled by The Wall Street Journal expected a reading of 52.0.

A reading above 50 points to expansion in activity in the sector, though one above 47.5, over a period of time, generally indicates an expansion of the overall economy.

BlackRock, EQT-Led Consortium to Acquire AES for $10.7 Billion

A consortium of investors including BlackRock's Global Infrastructure Partners and investment group EQT agreed to acquire AES for $10.7 billion as the AI data center buildout fuels surging demand for power generation.

Utility and power-generation companies like AES are gaining increasing attention as AI's vast energy needs place heavy burdens on power grids. "There is a need for significant investments in new capacity in electricity generation, transmission and distribution," said Bayo Ogunlesi, chief executive of BlackRock's Global Infrastructure Partners.

AES said the sale will provide it with necessary capital that it previously lacked to expand its U.S. energy generation.

Nvidia to Invest $2 Billion in Both Lumentum and Coherent

Nvidia is investing $2 billion in both Lumentum and Coherent as part of agreements to help accelerate advanced optics technologies for AI infrastructure.

The two separate agreements each include a multibillion-dollar purchase commitment from Nvidia and future capacity access rights for advanced laser products.

Meanwhile, the investments in each company will support research and development, and future capacity and operations as the two companies build out their U.S. manufacturing capabilities.

Elliott Accepts Revised Bid for Toyota Industries That Values It at Almost $40 Billion

Elliott Investment Management has agreed to a sweetened bid for Toyota Industries that values the company at almost $40 billion, paving the way for the Japanese forklift maker to be taken private.

The U.S. activist investor said Monday that it believed that the new terms, which followed months of discussions between the firm and Toyota group companies, represented an improved outcome for minority shareholders.

Elliott had opposed previous terms for Toyota Industries, saying that those substantially undervalued the Japanese forklift maker and that a stand-alone plan would offer a path to a much higher valuation.

Apple Announces New iPhone and iPad Air as Week of Launches Begins

Apple kicked off what's expected to be a week of product launches by announcing new iPhone and iPad models on Monday.

The tech giant announced the introduction of two new products, including the iPhone 17e, which will be the lowest priced option in the iPhone 17 lineup.

The iPhone 17e features a cellular modem made by Apple, the C1X, which the company says is twice as fast as the C1 modem in the iPhone 16e. This comes as Apple continues to transition away from Qualcomm modems that have typically been used in iPhones.