Stocks Fall on Report Trump Rejects Iran Proposal: Markets Wrap
(Bloomberg) — A renewed rally in oil drove stocks and bonds lower amid worries that a prolonged closure of the Strait of Hormuz will fuel inflation and weaken the global economy.
Equities extended losses and Brent crude topped $118 as Axios reported President Donald Trump will keep Iran under a naval blockade until it agrees to a deal that addresses concerns about its nuclear program. Treasury 10-year yields climbed to a one-month high, hitting 4.4%. The Nasdaq 100 outperformed ahead of results from giants Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp.
Trump has discussed steps the US could take to prolong its blockade of Iran during a meeting with oil and trading industry executives, according to a White House official. The Wall Street Journal said that Trump has instructed aides to prepare for an extended blockade of Iranian ports.
“The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig. And it is going to be worse for them. They can’t have a nuclear weapon,” Trump said in a phone interview Wednesday, according to Axios.
The jump in energy prices and disruption to supply chains stemming from the war have raised the possibility that Federal Reserve officials will remain comfortable in wait-and-see mode. Traders all but abandoned wagers on a rate cut this year and began to price in the chances of a hike in 2027.
Policymakers will release their statement at 2 p.m. in Washington, with Jerome Powell’s press conference to follow 30 minutes later.
“Elevated oil prices are adding to inflationary pressures, lifting Treasury yields and complicating the policy backdrop,” said Fiona Cincotta at City Index. “This creates a challenging environment for the Fed, requiring a balance between inflation risks and growth concerns.”
“Surging oil prices outweighed strong earnings,” said Mark Hackett at Nationwide. “Momentum has begun to fade as the tremendous tailwind from the herd collectively moving to the sidelines lightens, with relative weakness seen in many of the recent leaders.”
More likely, the market is entering a phase of consolidation rather than directional move, where earnings reports act as stock-specific catalyst and heightened volatility challenges conviction, he added.
With key tech bellwethers set to report results and no firm resolution on Iran, it’s likely that stocks are looking for news to justify the consolidation of gains before another leg higher, according to Chris Senyek at Wolfe Research.
“If artificial-intelligence spending is increased and the Fed sees energy costs as transitory, expect a rally. If we hear caution, we could see some interesting downside volatility,” said veteran strategist Louis Navellier.
Corporate Highlights:
Seagate Technology Holdings Plc gave a fourth-quarter forecast that was much stronger than expected. It also reported third-quarter results that beat expectations. Robinhood Markets Inc. reported net revenue for the first quarter that missed the average analyst estimate. Avis Budget Group Inc. reported a worse-than-expected quarterly loss the morning after a major investor revealed it sold a portion of its stake, sending shares on a roller coaster ride to start the day’s trading. Visa Inc. climbed as the company posted what analysts called “one of the cleanest” quarters in years. Starbucks Corp. reported better-than-expected results and said it now sees comparable sales rising at least 5% this year, up from its previous view of 3% or more. Booking Holdings Inc. cut its outlook for the full year as travel demand suffers from the conflict in the Middle East. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.2% as of 12:18 p.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average fell 0.6% The MSCI World Index fell 0.3% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1691 The British pound fell 0.2% to $1.3492 The Japanese yen fell 0.4% to 160.24 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $76,014.48 Ether fell 0.8% to $2,275.98 Bonds
The yield on 10-year Treasuries advanced six basis points to 4.40% Germany’s 10-year yield advanced four basis points to 3.11% Britain’s 10-year yield advanced seven basis points to 5.07% Commodities
West Texas Intermediate crude rose 6.8% to $106.69 a barrel Spot gold fell 0.8% to $4,558.54 an ounce ©2026 Bloomberg L.P.
