US markets closed lower on Monday as concerns about escalation in the Iran war eclipsed optimism driven by strong quarterly earnings growth.Markets slid into the red following reports that two Iranian strikes hit a US patrol boat and that a US warship was turned back in the Strait of Hormuz. Traders overlooked a report released by the Commerce Department showed that US factory orders rose 1.5% month-over-month to $630.4 billion in March 2026, beating market expectations of 0.5% and following an upwardly revised 0.3% increase in February. New orders for manufactured durable goods increased 0.8% to $318.9 billion, ending three straight months of declines. Computers and electronic products surged 3.6%, the most since March 2001, with electromedical, measuring, and control instruments up 7.9% to a record high amid an AI investment boom and data center construction. Transport equipment orders also rose 0.8%, led by vehicles (0.9%), defense aircraft and parts (17.8%), and ships and boats (30.9%). Gains were also seen in machinery (0.9%), electrical equipment, appliances, and components (0.8%), and primary metals (0.5%).
On the sectoral front, transportation stocks moved sharply lower, resulting in a 4.8 percent nosedive by the Dow Jones Transportation Average. Housing stocks also saw considerable weakness during the day, with the Philadelphia Housing Sector Index plunging by 3.4 percent.
Nasdaq decreased 46.64 points or 0.19 percent to 25,067.80, S&P 500 fell 29.37 points or 0.41 percent to 7,200.75 and Dow Jones Industrial Average declined 557.37 points or 1.13 percent to 48,941.9.
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