Stocks split ahead of a busy week after the US and Iran escalated fighting in the Middle East, sending oil prices higher, and AI stocks were under pressure.

Notching the sole green movement, the Dow Jones Industrial Average (^DJI) rose by roughly 0.1%. Meanwhile, the S&P 500 (^GSPC) dropped 0.3%, while the Nasdaq Composite (^IXIC) fell by 0.7% after the two indexes eked out gains last week.

Markets were on edge after the US renewed strikes near the Strait of Hormuz over the weekend, and Iran retaliated with fresh strikes against US allies, including Kuwait, Jordan, and Qatar. The flare-up threatened to derail talks between the US and Iran to end the war, which President Trump stated were ongoing even as he said he considers the ceasefire "over."

Oil prices jumped, with Brent crude (BZ=F) nearing $80 per barrel again, after the IRGC said "the Strait of Hormuz will be closed until further notice" and that it would not allow vessels to transit the strait "until the end of the American interventions in this area." Though the US insisted that the strait remains open.

The resumption of hostilities in the region revived inflation worries just as the market is set to receive two crucial inflation reports this week: the Consumer Price Index on Tuesday and the Producer Price Index on Wednesday. The readings will provide fresh signals on the likelihood of Fed interest rate hikes this year.

Investors also look forward to the unofficial kick-off of earnings season this week, led by big bank results from JPMorgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC), and more. Taiwan Semiconductor Manufacturing Company's (TSM) quarterly results will provide a signal on AI demand, and Netflix (NFLX) and Dow component UnitedHealth (UNH) will also report.