Oil prices climbed again as peace talks between the US and Iran stalled over the weekend.
Shipments through the Strait of Hormuz remain limited - keeping global oil supplies tight.
With Washington cancelling plans for talks in Pakistan, there is a distinct lack of motivation for stocks, according to Wealth Club's Chief Investment Strategist Susannah Streeter.
"Oil prices have cruised higher again, but some hopes of a resolution are being kept alive, with reports that Iran has put another proposal on the table which aimed at de-escalating the conflict and potentially seeing the key Strait of Hormuz reopen," noted Ms Streeter.
"But details are scant about the offer and patience on both sides is clearly frayed."
While US-Iran talks have stalled, stock markets' attention has swung back to the persistent boom in AI.
US stocks face a pivotal week of tech-led earnings - Microsoft, Alphabet, Amazon, Apple, Meta are all set to report.
According to Ms Streeter, tech is stepping firmly into the ring this week, with the industry heavyweights lining up for a closely watched round of results.
"With expectations high, these updates could go a long way in determining whether the current momentum can be maintained, given the outsized impact the tech giants have on indices," she said.
But she warned the circular nature of some of the deals being struck in the AI world has raised eyebrows.
"AWS is investing £5 billion into Anthropic, with another $20 billion expected over time, while Anthropic pledges to spend $100 billion on AWS products and services," said Ms Streeter.
"While the AI juggernaut is powering ahead and underlying demand looks so strong, given its constrained by capacity and not demand, such an ecosystem appears robust," she said.
"But if growth disappoints in the future or if market share shifts, such circular relationships could start to see cracks appear and become more fragile," she added.
Microsoft, Alphabet, Amazon and MetaPlatforms, are set to report on Wednesday, with Apple's results expected Thursday.
