Wall Street's major indexes slipped at the opening bell on Monday as fresh hostilities broke out between the United States and Iran for the first time in a month. The Dow Jones Industrial Average fell 0.49%, the S&P 500 dropped 0.25%, and the Nasdaq Composite declined 0.18%.

Among individual movers, Edison International tumbled 21.53%, Pacific Gas & Electric lost 19.82%, HWM slid 5.76%, Sempra Energy dropped 5.08%, Aon fell 4.90%, GEV retreated 3.12%, and Super Micro Computer declined 2.36%. In the "Magnificent Seven" group, Nvidia edged up 0.57%, Tesla inched higher by 0.05%, Apple slipped 0.11%, Meta Platforms fell 0.59%, Microsoft lost 0.78%, Amazon dropped 1.04%, and Alphabet shed 1.15%.

On Sunday, the US military's Central Command confirmed to MS NOW that American forces had struck two rocket launcher sites on Iran's Larak Island. This marks the first time since late July that Washington has publicly acknowledged a military strike against Iranian targets. In response, Iranian state media reported that Tehran launched attacks on a US military base in Jordan as an act of retaliation.

With the resumption of hostilities, oil prices surged sharply. US WTI crude futures jumped more than 3%, trading above $86 per barrel, while the international benchmark Brent crude futures also rallied over 3%, breaking through the $91 per barrel level.

Escalating tensions in the Middle East have made August trading conditions particularly volatile. However, driven by strength in the technology sector, Wall Street's major indexes are still on track to close the month in positive territory. The Dow Jones Industrial Average has gained 2.1% so far this month, positioning it for a fifth consecutive monthly advance. The S&P 500 and the Nasdaq Composite are poised for their first monthly gains since May, with respective advances of roughly 3% and 4%.

Both the S&P 500 and the Dow hit record highs earlier in August. Technology stocks have led the charge this month, with artificial intelligence-related names performing especially well. The S&P 500 technology sector has climbed nearly 6% in August. Nvidia shares have gained more than 8%, while Microsoft and Micron Technology each advanced 10% and 13%, respectively.

That said, August has remained turbulent across the broader market. Inflation concerns have pushed US Treasury yields to multi-year highs. Although the US Treasury announced an expansion of its bond buyback program in an attempt to curb the sell-off in the debt market, long-end yields continue to hover at elevated levels.

Federal Reserve Chair Kevin Warsh expressed concerns about inflation, noting: "Although this summer's inflation data came in better than expected, it does not indicate a substantive improvement in the underlying inflation trend." Barclays economist Jonathan Miller wrote in a research note: "While Warsh is not inclined to signal policy moves, this statement may not necessarily point to tightening in September, but the hawkish tone raises the probability of a 25-basis-point rate hike in September to above 50%. Combined with his inflation assessment, our baseline scenario calls for another rate increase in December."

Societe Generale has issued a warning that the Federal Reserve could raise interest rates three times by March of next year. The bank expects the Fed to begin hiking in September, citing persistent inflation and an improving labor market that are pushing policymakers toward a more restrictive stance. According to a new report from Societe Generale's chief US economist Jan Gruehn, the firm now forecasts quarter-point rate increases at both the September and December meetings, followed by one more hike in March 2027. However, the report notes that there is considerably more uncertainty surrounding the final hike.

Investors will get fresh signals on the US economy this week, with the August nonfarm payrolls report due out early Friday morning. Monthly manufacturing and services PMI data will also be released in the coming days.

Across Asian markets, Japan's Nikkei 225 slipped 0.14%; South Korea's KOSPI reversed early losses to close up 0.46%; China's CSI 300 gained 0.35%; Hong Kong's Hang Seng Index ended flat; and Australia's S&P/ASX 200 fell 0.18% to 9,076 points.

European equities finished mixed on Monday, with the pan-European Stoxx 600 closing nearly flat. Energy stocks moved higher, buoyed by the sharp surge in oil prices. UK markets were closed for a public holiday.