Oil prices climbed Monday amid ongoing conflict between the United States and Iran, while U.S. stock markets continued their trend of modest gains, pushing toward new record highs.

Brent crude oil rose 2.9 percent, settling at $104.21 per barrel, as tensions escalated following President Donald Trump’s rejection of Iran’s most recent ceasefire proposal. Trump described the ceasefire as being on “life support,” signaling that diplomatic efforts to end the conflict remain fraught. The president is scheduled to visit China later this week, where he is expected to seek support from President Xi Jinping to pressure Iran into concessions. China plays a critical role in the market as the largest purchaser of Iranian crude oil, despite international sanctions.

The war has driven oil prices up nearly 50 percent from pre-conflict levels near $70 per barrel, contributing to inflationary pressures worldwide. Despite this, U.S. financial markets have shown resilience, with investors betting that elevated energy costs might not persist. The S&P 500 edged up 0.2 percent to 7,412.84, surpassing its previous record set last Friday. The Dow Jones Industrial Average gained 95.31 points, or 0.2 percent, to 49,704.47. Meanwhile, the Nasdaq composite increased 0.1 percent to 26,274.13, reaching a fresh all-time high.

Market breadth was mixed, however, with a majority of stocks in the S&P 500 declining. Mosaic, a fertilizer producer, saw shares fall sharply after reporting results that fell short of analysts’ expectations. While Mosaic has benefited from higher product prices amid supply constraints caused by the conflict’s disruption of raw material logistics—particularly sulfur—it faces rising input costs that weigh on profitability.

Sectors most vulnerable to rising fuel prices also struggled. Dollar General’s stock dropped 7.6 percent, reflecting concerns about consumer spending power in the face of higher gasoline costs. Airlines and travel companies faced similar headwinds, with Royal Caribbean and Southwest Airlines shares declining 4.3 percent and 3.2 percent, respectively.

On the positive side, media company Fox gained 7.6 percent after posting quarterly profit and revenue growth surpassing analyst forecasts. More broadly, over 80 percent of S&P 500 companies reporting so far have exceeded earnings expectations. Analysts project overall corporate earnings growth approaching 28 percent for the quarter, potentially marking the strongest such increase since late 2021.

This robust corporate profitability extends beyond the U.S. According to strategists at Deutsche Bank, many global firms are also delivering their best earnings growth in more than four years, fueled in part by advances in artificial intelligence technology that are driving revenue and cost-efficiency gains.

Despite heightened geopolitical risks and inflationary challenges, the U.S. economy and equity markets have shown an ability to adapt, as investors remain focused on earnings strength and potential easing of energy price pressures.