Stocks fall after U.S. strikes Iran, but Wall Street heads for winning month

Stocks fell on Monday after the U.S. and Iran traded fire for the first time in a month, though the major averages were still pacing to close out August with gains.

The S&P 500 slipped 0.5%, while the Nasdaq Composite declined 0.4%. The Dow Jones Industrial Average traded 315 points, or 0.6%, lower, dragged down by losses in Goldman Sachs and Alphabet.

On Sunday, U.S. Central Command confirmed to MS NOW that the U.S. struck two rocket launchers on Iran's Larak Island.

Sunday's attack was the first publicly acknowledged U.S. strike on Iranian positions since late July, with Iranian state media reporting that Tehran had attacked U.S. bases in Jordan in retaliation.

Oil prices jumped after the hostilities resumed. U.S. West Texas Intermediate oil traded more than 2% higher at above $85 per barrel, while global benchmark Brent crude oil futures were up more than 2% at above $90 a barrel.

Longer-dated Treasury yields rose alongside oil prices Monday, adding to the downbeat sentiment in equities.

While Tom Hainlin of U.S. Bank Asset Management noted that oil's current levels are "a little high," the latest advance shouldn't be significantly damaging.