Stocks and Bonds Fall With Brent Back Above $100: Markets Wrap

(Bloomberg) — Oil surged back above $100 a barrel while stocks and bonds fell after President Donald Trump ordered a blockade of the Strait of Hormuz following the weekend’s deadlock in US-Iran peace talks.

Brent jumped 7.5% to above $102. The S&P 500 was set to open 0.6% lower. The yield on two-year Treasuries advanced two basis points to 3.82% as traders pared bets on a US interest-rate cut in 2026. The dollar rose 0.2%, its biggest gain in more than a week. Gold traded moderately lower near $4,730 an ounce.

Traders are bracing for another week of headline-driven volatility, with the flow of oil and gas through the Hormuz strait in focus as Trump’s restrictions on vessels calling at Iranian ports threaten to deepen a global energy shock. Even so, the relatively limited pullback in riskier assets suggested investors were cautiously optimistic that a resolution to the conflict remained within reach.

Meanwhile, earnings season is about to kick off, with investors eager to hear from executives on the impact of risks stemming from the war in the Middle East, artificial intelligence and private credit. Goldman Sachs Group Inc. will report before the US open. In Europe, LVMH needs to reassure investors about its outlook after the worst start to a year for the luxury bellwether’s shares.

“The moderate market reaction stems from investors being lost and unsure of what to do,” said François Dossou, head of equities at Sienna Gestion in Paris. “The blockade, aimed at economically strangling an unresponsive Iran, is yet another example of a market underestimating the risks to growth.”

In Europe, Hungary’s forint surged to a four-year high and local stocks hit a record after Prime Minister Viktor Orban lost Sunday’s election, with the opposition’s victory expected to help unlock billions of euros in European Union funding. Europe’s Stoxx 600 was 0.7% lower, tracking losses in the US and Asia.

The latest spike in crude, coupled with the marked rise in March US consumer prices, is shifting the bond market’s focus back to inflation. Japan’s 10-year yield climbed to the highest level since 1997 earlier on Monday before paring the move. European government bonds fluctuated. In the US, money markets are pointing to less than a one-in-five chance of a rate cut by December.

“Time is playing against markets as each day that goes by with oil prices this high weighs on global growth and pushes inflation,” said Gilles Guibout, head of European equities at BNP Paribas Asset Management. “It’s difficult to see how markets could stage a sustainable rebound without a sustainable solution to this crisis.”

Corporate Highlights:

Dolce & Gabbana appointed former Gucci boss Stefano Cantino as co-chief executive officer following the departure of co-founder Stefano Gabbana as chairman. Wise Plc said it’s on track to get its primary listing shifted from London to Nasdaq next month, as the money transfer company’s key fourth-quarter earnings figure beat analyst expectations. Shares rallied. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.7% as of 9:30 a.m. London time S&P 500 futures fell 0.6% Nasdaq 100 futures fell 0.7% Futures on the Dow Jones Industrial Average fell 0.5% The MSCI Asia Pacific Index fell 0.8% The MSCI Emerging Markets Index fell 0.7% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1691 The Japanese yen fell 0.2% to 159.65 per dollar The offshore yuan fell 0.1% to 6.8331 per dollar The British pound fell 0.2% to $1.3429 Cryptocurrencies

Bitcoin fell 0.9% to $70,738.82 Ether fell 1.4% to $2,183.98 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.33% Germany’s 10-year yield was little changed at 3.06% Britain’s 10-year yield advanced two basis points to 4.86% Commodities

Brent crude rose 7.4% to $102.26 a barrel Spot gold fell 0.4% to $4,730.88 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from James Hirai.

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