US President Donald Trump announced negotiations with Iran would begin Monday, focusing on reopening the Strait of Hormuz and the country's nuclear programme. The news sent crude oil prices tumbling, with Brent futures down 4.6% to $83.88 per barrel and WTI futures falling 4.5% to $77.80. The United States Oil Fund dropped more than 6% in premarket trading. Energy stocks also declined, with Chevron falling 1.2% and Exxon Mobil slipping 1.6%. Occidental Petroleum lost 1.5%, whilst Devon Energy and APA Corp dropped 2.6% and 2.8% respectively. Separately, Barclays raised its price target on Chevron to $216 from $213, citing record Permian production and stronger refining margins following the company's second-quarter results.

US stock futures rebounded Monday morning, with the Nasdaq leading gains at 0.7%, whilst the S&P 500 and Dow rose 0.35% and 0.3% respectively. Investors sought to recover from Friday's losses, when the Nasdaq fell 1.4%, marking its biggest weekly decline in four weeks. Lockheed Martin shares climbed in premarket trading after unveiling two new defence systems to counter drones and missiles. The company said the systems would provide more affordable and rapidly deployable solutions. Oil stocks Occidental, Exxon, and Chevron gained as crude prices remained elevated amid US-Iran tensions. Brent crude traded at $82.5 per barrel. GameStop converted its eBay investment into direct ownership, acquiring a 9.8% stake valued at nearly $4.9 billion through 43.39 million shares.

Occidental Petroleum, backed by Warren Buffett's Berkshire Hathaway, stands out among cash-producing stocks with a trailing 12-month free cash flow margin of 15.7%. The oil and gas explorer has delivered 6.1% annual revenue growth over the past decade, with a revenue base of $21.45 billion providing significant supplier negotiating power. Meanwhile, Herc Holdings and Scorpio Tankers face headwinds. Herc's operating margin declined 7.2 percentage points over five years as costs outpaced revenue growth, whilst earnings per share fell 28% annually. Scorpio Tankers saw revenue decline 13.6% annually over two years, with earnings per share contracting 17% annually. Occidental's strong free cash flow profitability positions it to fund new investments or return capital to shareholders through buybacks and dividends.