U.S. stock markets made modest gains Monday while oil prices fluctuated amid continued uncertainty over the ongoing war with Iran and potential escalation by the United States. The S&P 500 rose 0.3% in midday trading, while the Dow Jones Industrial Average gained 100 points or 0.2%, and the Nasdaq composite advanced 0.4%.

Oil markets remained volatile as investors weighed the impact of continued fighting and threats to critical shipping lanes. Benchmark U.S. crude rose 0.3% to $111.88 per barrel, while Brent crude added 0.2% to $109.26 per barrel. Both remain significantly above pre-war levels of around $70 per barrel. The ongoing conflict has disrupted oil flows through the Strait of Hormuz, through which one-fifth of the world's oil typically passes during peacetime.

President Donald Trump has set a deadline for military action against Iranian infrastructure if the country does not reopen the strait, though he has moved this deadline multiple times previously. Iran on Monday rejected the latest ceasefire proposal, with Iranian diplomat Mojtaba Ferdousi Pour stating that Iran seeks "an end of the war with guarantees that we won't be attacked again" rather than just a ceasefire. Fighting continued with an Israeli attack on an Iranian petrochemical plant.

The war's economic impact has spread globally, with U.S. gasoline prices reaching an average of $4.12 per gallon according to AAA, up from below $3 before the conflict began in late February. Countries more dependent on Middle Eastern oil have faced even greater price pressures. Treasury yields remained elevated at 4.32% for the 10-year note, well above pre-war levels of 3.97%, contributing to higher borrowing costs for mortgages and business loans.

Monday's trading also reflected positive U.S. employment data from Friday showing stronger-than-expected job growth and an unexpected improvement in the unemployment rate. A services sector report indicated continued expansion for the 21st consecutive month, though growth was slightly slower than expected and price pressures accelerated to their fastest pace since 2022.