Stocks Fall, Oil Rises on Hormuz Tension Flare-Up: Markets Wrap
(Bloomberg) — A rally in oil drove both stocks and bonds lower on concerns that an escalation of hostilities over the Strait of Hormuz will keep energy costs elevated, fueling global inflation risks.
Equities dropped from all-time highs as Brent crude jumped about 6%, topping $114. The US and Iran exchanged fire in the Persian Gulf amid a flare-up of violence that also drew in the United Arab Emirates. With oil prices not far from a four-year peak, the decline in Treasuries sent 30-year yields above 5%.
The US fought off Iran’s attacks as it facilitated the passage of two vessels through Hormuz. Meantime, the UAE blamed an Iranian drone strike for a fire at its Fujairah port and issued several missile alerts for the first time since a truce between Washington and Tehran took hold.
The wave of violence came after a plan announced by President Donald Trump to help vessels through the critical waterway, with Tehran warning it would strike US forces if they came near Hormuz. Iran will be “blown off the face of the earth” if they attack American ships guiding vessels, Trump told Fox News.
A vital trade thoroughfare, Hormuz has become a focal point in the current conflict, as Iran exerts its ability to impose asymmetric economic pain and the US struggles to reestablish free transits. The strait has been virtually blocked since US and Israel began strikes on Iran in late February.
“Even if the immediate conflict de-escalates, we expect the aftershocks will remain with us for some time,” said Darrell Cronk at Wells Fargo Investment Institute. “The effects — on energy prices, industrial activity, and geopolitical risk premia — are unlikely to fade quickly.”
“A diplomatic solution to this conflict remains the most likely outcome,” said James McCann at Edward Jones. “However, the risk of a more prolonged or larger disruption to global energy markets remains important to monitor, in our view, especially with markets having rallied sharply in recent weeks.”
Judging by last week, the market’s recipe for near-term upside will be sidestepping negative surprises out of the Middle East to allow what has been a stronger-than-average earnings season to continue to dominate sentiment, noted Chris Larkin at E*Trade from Morgan Stanley.
Earnings revisions for the S&P 500 have moved higher across multiple time horizons over the past month, according to Michael Wilson at Morgan Stanley. Second-quarter estimates are up 2% and forecasts for calendar 2026 and the next 12 months have risen 3% and 4%, respectively.
“Unless we experience a meaningful external shock, it will be hard to derail momentum and hand control back to the bears,” said Mark Hackett at Nationwide. “That is what is giving this rally a more durable and credible foundation than what we saw just a few weeks ago.”
Corporate Highlights:
Amazon.com Inc. unveiled a suite of logistics services that will let businesses buy its existing freight and distribution offerings as a package, sending shares of rival delivery companies such as FedEx Corp. and United Parcel Service Inc. lower. GameStop Corp. is trying to buy eBay Inc. for about $56 billion in cash and stock, a bold attempt by Ryan Cohen to take over a storied e-commerce name several times larger. A startup backed by General Catalyst Partners agreed to acquire Global Business Travel Group Inc., the travel platform spun out of American Express Co., in a deal worth about $6.3 billion. Berkshire Hathaway Inc.’s cash pile soared to its highest level ever and operating earnings jumped in Greg Abel’s first quarter as chief executive officer. Tyson Foods Inc. raised its full-year profit outlook as strong protein demand enables growth even as the struggling beef segment shows no signs of turning around. What Bloomberg strategists say…
“The 10-year yield is nearing a sensitive area that’s proved hard to digest in recent years. If stocks are more immune to oil prices than bonds, the question is how long they can stay as resistant to higher yields.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.5% as of 3:03 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 1.2% The MSCI World Index fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1696 The British pound fell 0.3% to $1.3536 The Japanese yen was little changed at 157.06 per dollar Cryptocurrencies
Bitcoin rose 1.5% to $80,065.63 Ether rose 1.3% to $2,360.6 Bonds
The yield on 10-year Treasuries advanced seven basis points to 4.44% Germany’s 10-year yield advanced five basis points to 3.09% Britain’s 10-year yield was little changed at 4.96% Commodities
West Texas Intermediate crude rose 3.6% to $105.65 a barrel Spot gold fell 2.1% to $4,515.32 an ounce ©2026 Bloomberg L.P.
