Stocks End August Lower as Rising Oil and Renewed U.S.-Iran Tensions Pressure the Market

The major averages finished a broadly weaker Monday session off their lows as late buying interest in technology stocks helped limit the damage. The S&P 500 declined 0.3%, while the Nasdaq Composite slipped just 0.1% after recovering much of its earlier loss. The Dow Jones Industrial Average underperformed with a 0.7% decline as rising crude oil prices and renewed hostilities between the U.S. and Iran weighed on sentiment throughout the session.

Crude oil was one of the market’s most important influences. WTI futures settled $2.45 higher, or 2.9%, at $85.83 per barrel, recovering a large portion of last week’s decline. The advance followed the latest escalation between the U.S. and Iran and raised renewed concerns about potential disruptions to energy supplies and shipping through the Strait of Hormuz.

Geopolitical tensions intensified further during the afternoon after Axios reported that President Trump is considering limited strikes aimed at preventing Iran from rebuilding its ability to attack ships in the Strait of Hormuz. Energy stocks were the clear beneficiaries of the renewed rise in crude, with the sector gaining 2.1% to finish comfortably atop the S&P 500 sector standings.

Most of the market moved in the opposite direction. Small- and mid-cap stocks participated in the broader weakness, with both the Russell 2000 and S&P MidCap 400 declining 0.5%.

Technology provided an important source of support, particularly late in the session. The information technology sector gained 0.3% as semiconductor stocks attracted buying interest shortly before the close, helping pull the major averages away from their session lows.

The PHLX Semiconductor Index advanced 0.6%, finishing August with a 2.0% gain despite considerable volatility throughout the month. NVIDIA (NVDA 220.50, +2.95, +1.36%) was among Monday’s semiconductor standouts following last week’s earnings-driven surge.

Elsewhere in technology, CrowdStrike (CRWD 231.00, +12.60, +5.77%) extended its own post-earnings advance and finished as the best-performing component in the S&P 500.

Mega-cap performance was less encouraging overall. The Vanguard Mega Cap Growth ETF declined 0.2% as most of the Magnificent Seven finished lower. Communication services (-1.6%) was among the weakest sectors, with Alphabet (GOOG 335.41, -7.47, -2.18%) providing a significant drag.

Amazon (AMZN 259.77, -6.66, -2.50%) pressured consumer discretionary (-0.7%) after The Wall Street Journal reported that the Federal Trade Commission plans to file a lawsuit against the company.

Tesla (TSLA 368.01, +19.26, +5.52%) was a notable exception to the broader mega-cap weakness. The stock rallied sharply and climbed back above its 50-day moving average of 359.81 amid enthusiasm surrounding autonomous-driving and energy-storage developments. Elon Musk’s comments outlining an aggressive goal of reaching 100 GW of annual solar production also contributed to the positive sentiment surrounding Tesla.

Selling pressure remained pronounced in several other areas of the market. Utilities and industrials each declined 1.2%. Edison International (EIX 53.96, -16.21, -23.10%) and PG&E (PCG 13.28, -3.32, -20.00%) continued to weigh heavily on utilities amid developments surrounding California wildfire legislation.

Industrials were pressured in part by weakness among military contractors. Howmet Aerospace (HWM 244.91, -19.94, -7.53%) was a notable laggard after Elon Musk said in-house SpaceX (SPCX 143.75, +2.25, +1.59%) casting of natural-gas turbine blades and vanes could accelerate turbine deployment by as much as 18 months.

In other corporate news, Aon (AON 321.34, -34.06, -9.58%) fell sharply after agreeing to acquire USI Insurance Services for $17.0 billion in cash.

Monday’s session ultimately reflected broad underlying weakness as rising crude oil prices and renewed U.S.-Iran tensions created another source of uncertainty for investors. Energy was the clear beneficiary, while late buying in semiconductors and other technology stocks helped the major averages recover from their lows and prevented a more pronounced decline.

Despite ending the final trading day of August on a negative note, the major averages still secured solid gains for the month. The late resilience in technology offered some support heading into September, but the combination of renewed geopolitical risk, elevated oil prices, and a more hawkish interest-rate outlook leaves investors facing a potentially more challenging set of crosscurrents as the new month begins.

Our FTinvest 11 model portfolio declined 0.59% to close at 1,008.00, giving back part of Friday’s rebound and ending August only modestly above the psychologically important 1,000 level. The portfolio now stands approximately 8.1% below its all-time closing high of 1,096.33, reflecting the significant late-August pullback from July’s record territory while remaining outside the 10% correction threshold.

FTinvest 11 is now up approximately +8.60% year-to-date, closing August with a meaningful positive return for 2026 despite the volatility experienced during the second half of the month. The late-August selloff substantially reduced the portfolio’s summer gains and brought it close to correction territory, although the 1,000 level has continued to hold. As August concludes, FTInvest 11 remains focused on its disciplined, value-driven approach to long-term capital appreciation while navigating the recent increase in short-term volatility.