U.S. stocks tumbled Monday as traders assessed the market fallout from escalating Middle East tensions, with oil prices surging and President Trump warning that U.S.-Israeli strikes on Iran could extend for weeks. The S&P 500 opened 0.7% lower, led by consumer discretionary and communication services sectors, while more than three stocks fell for every one that gained.

The Nasdaq 100 and Dow Jones Industrial Average both dropped 0.7% and 0.8% respectively, as the Cboe Volatility Index spiked, signaling heightened market anxiety. Defense stocks and oil producers rallied while airlines and cruise operators plunged on fuel price concerns. AES Corp. emerged as the worst performer after its $10.7 billion acquisition by BlackRock's GIP and EQT fell below market expectations.

Energy stocks dominated early gains as crude oil prices jumped, with Occidental Petroleum among the top performers amid fears of supply disruptions through the Strait of Hormuz. While some strategists see the selloff as a tactical buying opportunity, market experts warn that the current drop remains muted despite elevated geopolitical risk premiums. Investors now await key economic data releases later this week.