Oil Extends Gains as Hormuz Deal Remains Elusive: Markets Wrap
(Bloomberg) — Oil climbed in early Monday trading and US equity futures were steady as investors awaited signs of fresh progress on a deal to reopen the Strait of Hormuz.
Global benchmark Brent crude traded above $84 a barrel at the open after rising more than 5% over the previous three sessions. S&P 500 contracts were little changed after the underlying gauge closed 0.6% higher on Friday at a fresh record. The dollar was mainly steady against major peers.
Iran and Oman remained short of a final deal to reopen Hormuz at the weekend, while Tehran on Saturday renewed a hefty list of demands for Washington as conditions for a full reopening of the strait, indicating any immediate respite for oil and gas supplies may be limited.
Still, President Donald Trump on Sunday signaled patience, in an interview with Axios, saying the US could wait for Tehran’s economic suffering to soften its stance. The comments followed weeks of Trump threatening massive airstrikes on Iran only to pull back, saying he wanted to give negotiations a chance.
Investors can’t be too bearish given Trump is likely to back away from his threats again, particularly as his approval ratings have fallen to fresh lows, My Bui, an economist at AMP Ltd. wrote in a note to clients. “So for now, it remains business as usual, with shares still supported by solid fundamentals, strong economic growth and rising productivity.”
Futures indicate Asian markets may climb in early trading in a catch-up trade to US peers after a sharp slowdown in the nation’s jobs market.
Employers unexpectedly cut jobs in July and hiring in the prior two months was revised lower, suggesting the labor market is weaker than previously thought. Traders trimmed the chance of a rate hike at the Federal Reserve’s September meeting to a roughly 43% chance, down from 64% a week ago, according to swaps data compiled by Bloomberg.
Contracts on Australia’s S&P/ASX 200 Index rose 0.4% in Friday night’s session while those on Japan’s benchmark index surged almost 1%. Asian currencies may also gain after US bond yields fell and the dollar slid to a two month low.
There’s “a positive backdrop for Asia-Pacific with softer US dollar, lower crude oil prices and the broad recovery of equity sentiment,” Wee Khoon Chong, a strategist at BNY in Hong Kong, wrote in a note to clients.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 7:03 a.m. Tokyo time Currencies
The euro was little changed at $1.1558 The Japanese yen was little changed at 157.83 per dollar The offshore yuan was little changed at 6.7427 per dollar The Australian dollar was unchanged at $0.7067 Cryptocurrencies
Bitcoin rose 0.1% to $65,198.95 Ether rose 0.2% to $1,924.16 Commodities
West Texas Intermediate crude rose 1.3% to $79.22 a barrel Spot gold fell 0.2% to $4,334.67 an ounce
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