As the war between the United States and Iran remains mired in a negotiation deadlock for its eighth month, the New York stock market began the week with mixed movements across indices. The tech-heavy Nasdaq is rising, while the Dow Jones Industrial Average and the small-cap-focused Russell 2000 are trading lower.

Nasdaq Up, Dow Down... Widening 'Temperature Gap' Between Indices

As of 10:40 p.m. on the 5th Korean time (9:40 a.m. Eastern time), the Dow is trading at 51,000.61, down 176.35 points (0.34%) from the previous session. The S&P 500 is up 11.59 points (0.15%) at 7,734.31, and the Nasdaq Composite is up 138.13 points (0.51%) at 27,328.99. The Russell 2000 is down 3.71 points (0.13%) at 2,829.18.

The most notable feature in early trading is the temperature gap between indices. The spread between the Nasdaq's gain (0.51%) and the Dow's decline (-0.34%) has widened to 0.85 percentage points. The Nasdaq is moving near its intraday high (27,334.40), just 5.41 points below it. The Dow, meanwhile, rose to 51,199.25 right after the open before falling back 198.64 points to near its intraday low (50,987.48). The Dow's intraday range is 211.77 points, with a battle continuing around the 51,000 level. However, as it is only 10 minutes after the open, it is too early to attribute the movements to any specific catalyst.

Biggest External Variable Is the Middle East War Situation... Key Issue Is the Strait of Hormuz

The market's biggest external variable is the Middle East war. This war began with attacks by the United States and Israel on February 28, shaking global oil supplies and driving up prices. Recently, the U.S., having failed to secure a decisive end to the war through large-scale bombing, has reduced military operations and shifted its weight toward economic pressure.

The core issue is the Strait of Hormuz. After President Trump rejected Iran's conditions for reopening the strait, Iran's deputy foreign minister said the U.S. position is being reviewed according to internal procedures and that Iran is preparing for other scenarios. An Iranian Foreign Ministry spokesman presented the cessation of interference with Iranian commercial shipping and the lifting of sanctions as preconditions for reopening the strait. Iranian Foreign Minister Araghchi claimed there is no military solution or solution based on new sanctions, and that only negotiations can end the war.

Physical Clashes Continue in the Strait... U.S. Troops in Region to Reach 20,000 with Reinforcements

Physical clashes continue in the strait. According to the UK Maritime Trade Operations (UKMTO), at least four vessels were hit by unidentified projectiles in and around the strait this week, and on the 4th a tanker suffered engine room damage. The U.S. is enforcing a counter-blockade on Iranian ports and striking vessels it deems in violation.

The possibility of a U.S. military response is also growing. The Theodore Roosevelt carrier strike group and the Makin Island amphibious ready group are heading to the Middle East, and with roughly 7,000 Navy sailors and about 2,000 Marines joining, U.S. forces in the region will increase to about 20,000. The reinforcements could arrive by the end of October. President Trump has also mentioned the possibility of resuming strikes on Iran after the November midterm elections.

Oil Producers Freeze Output, G7 Releases Oil... Supply Responses Proceed in Parallel

In the energy market, supply concerns and supply countermeasures are operating simultaneously. On the 4th, seven major oil-producing countries, including Saudi Arabia and Russia, agreed to maintain November production at current levels with Brent crude trading above $100 per barrel, and will meet again on November 1. The G7 will release 100 million barrels of crude oil and petroleum products over the next four months, with a large-scale priority release of diesel within the first 20 days. The International Energy Agency (IEA) said 325 million of the 400 million barrels pledged in March have already been released.

Supply disruptions are being somewhat eased as alternative export routes increase. Maritime data firm Kpler estimated that Middle East oil exports excluding Iran exceeded pre-war levels last week, with 40% of the volume bypassing Hormuz. Experts, however, believe the situation remains far from normal.

Front Spreads to Yemen... Fuel Costs Become a Political Variable in the U.S.

The front is also spreading to Yemen. Yemen's Houthi rebels claimed they attacked oil facilities near Riyadh with ballistic missiles and drones on the 3rd. The Yemeni government, backed by Saudi Arabia, declared the launch of a military operation to retake all Houthi-controlled territory. With Gulf oil-producing countries' facilities becoming direct targets, oil supply risks are no longer confined to Hormuz alone.

In the U.S., the burden of war-driven fuel costs has emerged as a political variable. Ahead of the November midterm elections, rising gasoline and diesel prices have become a major voter concern, and about one-third of states have implemented fuel tax cuts. Energy Secretary Wright answered "of course" when asked whether fuel prices would fall within the next four weeks.

[This article is not investment advice, and the indices cited are intraday figures that may change by the close. Investment decisions and the responsibility for them rest with the investor. AI provided some assistance.]