Stocks Fall, Oil Jumps on Doubts Over Peace Deal: Markets Wrap
(Bloomberg) — A rally in oil drove stocks lower as a turbulent weekend in the Middle East cast doubt on prospects for peace talks between the US and Iran before their fragile ceasefire deal expires.
Equities dropped from all-time highs, with the S&P 500 halting a five-day winning streak as President Donald Trump said it’s “highly unlikely” he would extend the two-week truce if an agreement is not reached before it ends, while noting the Strait of Hormuz would remain blocked until an accord is finalized. Brent crude hovered near $95. Treasuries and the dollar wavered.
Iran held back from saying whether it would take part in further peace talks even after Trump noted that a delegation was on its way to Pakistan, creating uncertainty about whether a breakthrough can be achieved.
Transits through Hormuz have reduced to a trickle amid the war as Iran tightens control in retaliation for strikes. On Friday, that paralysis appeared to be at an end, with Tehran saying it would reopen the waterway, before reversing course as the US maintained a naval blockade and attacked an Iranian ship.
“Well, that didn’t last long, did it? The much-talked-about ‘reopening’ of the Strait of Hormuz barely made it through a day before Friday’s tensions came straight back into play,” said Fawad Razaqzada at Forex.com. “Still, there’s a sense that both sides might be posturing — talking tough with the deadline looming to strengthen their negotiating hands.”
Despite the recent escalation, markets are expecting a lasting ceasefire to be agreed to in the relatively near future, according to Tom Essaye at The Sevens Report.
“As long as the ceasefire talks in Pakistan aren’t canceled, markets should mostly ignore any negative geopolitical headlines,” he said.
While investors will keep their eyes on the situation in the Middle East, the next catalyst for Treasuries could come from Trump’s pick to lead the Federal Reserve, Kevin Warsh, who will face a confirmation hearing on Tuesday.
The former Fed board member had said before the war that rates should be lower, in line with the views of Trump, who has repeatedly called for policy easing. Warsh’s comments on the disinflationary nature of artificial intelligence had caused a rally in bonds, with markets anticipating a more dovish path for rates than under current Chair Jerome Powell.
The week’s marquee US economic data release will be retail sales on Tuesday. Analysts project a sizable jump in overall sales for March, largely due to sharply increased spending on gasoline. The figures aren’t adjusted for price changes, and drivers experienced costlier fill-ups because of the Iran war.
Corporate Highlights:
Companies involved in psychedelic-tied therapies rallied after President Donald Trump signed an executive order to expedite research and access. Marvell Technology Inc. climbed after the Information reported that Google is in discussions with the semiconductor company to develop two new chips to run AI models more efficiently. AST SpaceMobile Inc. sank after Blue Origin’s flagship New Glenn rocket failed to correctly place a payload it was carrying for the Texas-based satellite networking company into its intended orbit. Eli Lilly & Co. has agreed to buy Kelonia Therapeutics for as much as $7 billion, gaining access to a potential cutting-edge approach to treating blood cancer. Michael Saylor’s Strategy Inc. bought $2.54 billion in Bitcoin over the previous seven days, marking the digital asset treasury company’s largest acquisition of the original cryptocurrency since November 2024. Some of the main moves on markets:
Stocks
The S&P 500 fell 0.3% as of 12:30 p.m. New York time The Nasdaq 100 fell 0.5% The Dow Jones Industrial Average fell 0.1% The MSCI World Index fell 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1787 The British pound rose 0.2% to $1.3539 The Japanese yen was unchanged at 158.64 per dollar Cryptocurrencies
Bitcoin rose 1% to $75,430.54 Ether rose 1.1% to $2,305.72 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.26% Germany’s 10-year yield advanced two basis points to 2.98% Britain’s 10-year yield advanced seven basis points to 4.83% Commodities
West Texas Intermediate crude rose 5.7% to $88.67 a barrel Spot gold fell 0.6% to $4,803.41 an ounce ©2026 Bloomberg L.P.
