Stocks end higher, but cuts gain after Trump says Iran decision imminent

U.S. stock benchmarks finished higher on Monday, but well off the peak of the day, as energy shares pulled back following a late-afternoon tweet from President Donald Trump indicated that a decision was imminent on whether the U.S. would decertify a 2015 Iran nuclear pact.

The broader market had been enjoying a bump from energy-related companies, which rallied as crude-oil prices hit multiyear peaks.

How are the main benchmarks performing?

The Dow Jones Industrial Average finished 94.81 points, or 0.4%, higher at 24,357.32. The S&P 500 index added 9.21 points to 2,672.63, or 0.4%. The Nasdaq Composite Index rose 55.60 points, or 0.8%, to 7,265.21. All three indexes closed off their session highs.

The S&P and the Nasdaq recorded a second straight positive session, while the Dow posted its third gain in a row.

Seven of the 11 S&P 500 sectors closed higher on the day. Energy had been the biggest gainer for much of the day, but its was information technology that led, up 0.8%, which energy, which at one point during the session showed a gain of about 2%, closed the day with an advance of 0.2%.

The Russel 2000 the index of small capitalization stocks, meanwhile, closed 13.34 points, or 0.9%, higher at 1,578.95.

What’s driving markets?

Trump tweeted that he would make an announcement on a possible decertification of the Iran nuclear agreement that the Obama administration had reached with the Middle Eastern country back in 2015. European leaders had urged Trump not to abandon the pact.

Trump had until May 12 to decide whether to keep the deal intact. Abandoning it would trigger a reimposition of economic sanctions on Iran, hampering oil exports from the country and cutting global supply.

Meanwhile, U.S. oil benchmark  ended sharply higher on the day but came off those highs in electronic trading, retreating from its highest level since 2014.

Beyond oil, global trade headlines were also in focus, after a team of U.S. negotiators weren’t able to secure a trade agreement after multiday talks with counterparts in Beijing. China state media said talks were positive, and more negotiations would be needed to avoid a trade war, the South China Morning Post reported.

Also on the trade front, officials from Canada, Mexico and the U.S. met in Washington for another round of discussions regarding the North American Free Trade Agreement. Market participants expect the parties to reach a deal in principle this month.

Richmond Federal President Tom Barkin, meanwhile, kicked off the of the trio of Fed speakers scheduled for the afternoon, saying inflation was stable and there was no need for the Fed to step up its pace in the current economy environment.

In economic data, consumer credit rose 3.6% in March.

What are strategists saying?

“We’re waiting on more clarity about the Iran deal. If Trump pulls out, which other leaders have urged him not to do, then supply will be cut, which will have the same impact as rising demand in terms of driving up prices. But even beyond that, we’re entering the summer driving season and the energy sector has been down for so long that it looks poised for a rebound,” said Mark Martiak, senior wealth strategist at Premier Wealth/First Allied.

“Beyond that, there are no obvious catalysts on the horizon, which leaves more room for geopolitical risk to impact trading. I think valuations are fair, but I also expect we’ll see a lot more volatility going forward.”

Which stocks are in focus?

Energy stocks earlier rose broadly alongside the gain in oil, but pared gains following Trump’s tweet. Chevron Corp.’s  stock fell 0.5% after being up as much as 2.3% on the day, while Exxon Mobil Corp.  shares ended up 1.1%, but were up 2.8% at the peak. ConocoPhillips  shares finished 0.1% lower.

First-quarter earnings season remains in focus, though the vast majority of S&P 500 companies have already posted their results.

Tyson Foods Inc. reported quarterly earnings and sales that missed analyst forecasts. Shares rose 0.4%.

Sempra Energy  unexpectedly reported a drop in its first-quarter revenue. Adjusted earnings also came in below forecasts. The stock fell 1%.

Sysco Corp.  shares climbed 1.9% after the company reported earnings that came in above expectations.

Cognizant Technology Solutions Corp.‘s stock  sank 5.3% after it provided an outlook that was below expectations.

Starbucks Corp.  shares declined by 0.5% after Nestlé SA  earlier said it has reached a deal to market the coffee chain’s consumer and food service products. Starbucks will receive a $7.15 billion upfront payment as part of the deal.

Athenahealth Inc. shares jumped more than 16.4% after Elliott Management made a $7 billion bid for the company.

Gramercy Property Trust’s stock surged 15.5% after the commercial real-estate asset management company said it would be acquired by Blackstone Group LP  in a cash deal valued at $7.6 billion.

Shares of International Flavors & Fragrances Inc. fell 11% after announcing a $7.1 billion stock-and-cash deal to acquire Israel-based Frutarom Industries, Ltd.

Shares of Berkshire Hathaway Inc.  class A rose 1% after the multinational conglomerate reported over the weekend that it swung to a rare loss in the first quarter due to lower insurance premiums and an accounting rule change.

At the Berkshire shareholder meeting on Saturday, chairman Warren Buffett commented on a range of topics. He applauded Apple Inc.’s  share buybacks, defended a stake in Wells Fargo & Co.  and explained why he doesn’t invest in Microsoft Corp.  shares. He said bonds are a ‘terrible investment’ near current yields and cryptocurrencies “will come to bad endings.”

What are other markets doing?

European stocks climbed higher on Monday, while Asian stocks finished mostly higher.

The ICE U.S. Dollar Index rose to a four-month high, up 0.2% at 92.779. Gold futures for June 2018  settled slightly lower.

—Barbara Kollmeyer contributed to this article