Oil Jumps on Iran Tensions, US Stock Futures Drop: Markets Wrap
(Bloomberg) — Oil jumped and US equity-index futures retreated as traders turned cautious following a weekend flare-up in US-Iran tensions, curbing optimism that strains in the Middle East were easing.
Brent rose 5.5% to $95.33 a barrel after the US Navy seized an Iranian ship during a chaotic weekend that saw Tehran firing at vessels and reimposing controls in the Strait of Hormuz. S&P 500 futures fell 0.7% after the underlying index closed at a record high Friday following Iran’s earlier declaration that the vital waterway was “completely open.” Contracts indicated European shares will decline 1.4%.
Treasuries dropped across the curve on concern higher oil prices will stoke inflation. The dollar — the haven of choice during the conflict — edged up after falling over the past three weeks on hopes for an end to the war.
Even so, most of Monday’s relatively modest moves returned markets to last week’s levels, when expectations of a diplomatic resolution had lifted sentiment. MSCI’s Asian share benchmark pared most of its earlier gains to edge up 0.2%, with technology outperforming. A gauge of emerging market equities also fully recovered its war-related losses.
Renewed strains and disruptions in the Strait of Hormuz threaten to reintroduce volatility into markets after a broad unwinding of war-driven risk premiums in recent weeks. With the two-week ceasefire set to expire Tuesday, the focus is shifting to whether the US and Iran can resume negotiations to ease tensions and reopen the key waterway after initial talks in Islamabad failed.
“It does seem like moving in the same circles to a certain degree,” Kerry Craig, a global market strategist at JPMorgan Asset Management, said on Bloomberg Television. Markets “are looking through what could be the end of or at least the beginning of the end of this conflict.”
What Bloomberg Strategists Say…
“The surge in Asia’s major stock markets on Monday signals investors may have decided the worst of the US-Iran conflict’s impacts on the global economy has already been priced in. With valuations reset to a lower level by last month’s slump, that means equities are likely to extend their advance unless there is a return to sustained exchanges of fire in the Middle East.”
— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
President Donald Trump and Iranian officials offered disparate views on the next stage of the war, casting uncertainty over whether the two sides would meet for peace talks with the ceasefire set to expire in the coming days.
Iran signaled it may not join a second round of talks this week while the US maintains a naval blockade, hardening a standoff that had appeared to thaw on Friday and sparked a broad rally in stocks.
Trump, who on Friday said a deal with Iran was all but agreed, threatened by Sunday morning to destroy every power plant and bridge in Iran if negotiations fail. The whiplash underscores how much of last week’s rally was built on hope rather than resolution.
“Although there were various developments over the weekend, things didn’t move in a direction that would cause a major breakdown in ceasefire talks, as had been feared,” said Yugo Tsuboi, chief strategist at Daiwa Securities Co. “So for now the market reaction has been calm.”
In other corners of the market, gold fell 0.9% to about $4,790 an ounce and silver declined 1.7%. Bitcoin was a touch weaker at around $74,250. The Treasury 10-year yield rose two basis points to 4.27%, while European bond futures edged lower.
European natural gas futures surged as much as 11% on Monday as Tehran on Saturday again closed the chokepoint, after it said a US blockade of Iran-linked ships violated the ceasefire agreement.
“What matters now is whether ships can actually move through the Strait of Hormuz,” said Kenneth Goh, director of private wealth management at UOB Kay Hian Pte. “Friday’s record high in the S&P 500 was based on the idea that the Iran truce would hold, and the weekend showed that is not a safe assumption.”
Earlier on Friday, the S&P 500 Index capped a third straight week of gains of more than 3% and is set for its biggest monthly advance since 2020. Gauges in Taiwan, Singapore and China’s CSI 300 Index had all reversed losses that came after the US and Israel attacked Iran in late February.
South Korea’s equity benchmark Kospi advanced as much as 1.4% on Monday, wiping out the losses incurred since the start of the war, driven by a rally in chipmakers as artificial intelligence trade swung back into investor focus.
“I still think we are getting to or already at peak uncertainty though agree there is hedging risk,” said Billy Leung, an investment strategist at Global X Management. “The selloffs are happening on thin volume, which tells me it is positioning not conviction.”
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.7% as of 6:51 a.m. London time Nasdaq 100 futures fell 0.8% The MSCI Asia Pacific Index rose 0.2% The MSCI Emerging Markets Index rose 0.3% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng rose 0.4% The Shanghai Composite rose 0.5% Euro Stoxx 50 futures fell 1.4% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1750 The Japanese yen fell 0.2% to 158.99 per dollar The offshore yuan was little changed at 6.8208 per dollar The British pound fell 0.2% to $1.3488 Cryptocurrencies
Bitcoin fell 0.5% to $74,260.26 Ether fell 0.5% to $2,269.28 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.27% Japan’s 10-year yield declined 2.5 basis points to 2.395% Australia’s 10-year yield declined five basis points to 4.94% Commodities
Spot gold fell 1% to $4,784.21 an ounce West Texas Intermediate crude rose 6.2% to $89.03 a barrel This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi, Winnie Hsu, Momoka Yokoyama and Ruth Carson.
©2026 Bloomberg L.P.
