Geopolitical tensions between the U.S. and Iran cast a shadow over Wall Street Monday, causing stocks to slip while oil prices climbed. Brent crude surged 5.6% to $95.48 a barrel as markets reacted to fresh Middle East strains. Major indexes retreated from record levels set last week, with tech stocks bearing the brunt of the selling pressure amid uncertainty about potential disruptions to global energy supplies.

President Trump's social media threat to attack Iranian infrastructure if no deal is reached added uncertainty to the trading session. U.S. negotiators are expected to arrive in Pakistan tonight for talks with Iran this week, though Tehran has questioned its participation. The market reaction remained muted compared to earlier conflict periods, suggesting investors have become somewhat accustomed to these geopolitical flare-ups.

Despite the geopolitical concerns, stocks tied to the real economy rallied as investors distinguished between oil-related volatility and broader economic fundamentals. The Nasdaq composite fell 0.3%, while the S&P 500 declined 0.2% and the Dow Jones Industrial Average dropped less than 0.1%. Oil prices remain well below their $120 high from earlier in the conflict, indicating the market believes supply disruptions will be limited.