Stocks Fall as Hormuz Deadlock Boosts Oil Prices: Markets Wrap
(Bloomberg) — A standoff between the US and Iran over key issues lifted oil prices, dragging down stocks and bonds on concern that a prolonged closure of the Strait of Hormuz could worsen energy disruptions and fuel inflation.
While Tehran said the latest proposal from Washington has partly bridged the gap between the two sides, conflicting reports on Iran’s uranium enrichment plans were seen as a potential setback for a peace deal. The S&P 500 erased this week’s gain. US crude hovered near $100, driving Treasury yields higher on worries that price pressures will force the Federal Reserve to raise rates.
With little sign the Iran war will be resolved anytime soon, traders have been on high alert for clues on the status of talks that could lead to a Hormuz reopening. Traffic through the waterway has shriveled since the conflict erupted, causing energy prices to soar while rattling economies, companies and markets.
Iran is discussing with Oman how to set up some form of a permanent toll system that will formalize its control of maritime traffic through the energy chokepoint. President Donald Trump told reporters the US wants the strait to be open and free of tolls.
“We want it open, we want it free, we don’t want tolls,” he said. “Right now, we’re negotiating and we’ll see.”
Tehran is in the process of responding to a text submitted by the US, which “has narrowed the gaps to some extent,” Iranian Students’ News Agency reported. Supreme Leader Mojtaba Khamenei issued a directive that near-weapons-grade uranium should not be sent abroad, according to Reuters. Later, Al Jazeera said no new uranium directive has been issued.
The US will likely destroy Iran’s enriched uranium if and after it gets it, Trump told reporters at the White House.
“While geopolitical risks could still flare up, the more pressing issue appears to be macro-related,” said Bret Kenwell at eToro. “Elevated energy prices continue to fuel concerns about longer-term inflation. Markets will have plenty to digest in the coming weeks and months.”
The inflation worry and prospects of consequential rate hikes have unsettled investors. The danger that comes with higher borrowing costs is that expansion in some economies could grind to a halt. While US manufacturing activity expanded by the most in four years, that was seen by many as only a temporary boost as customers strived to get ahead of mounting price pressures.
Jamie Dimon said interest rates may climb much further, a warning to bond investors at a time when yields have touched multi-year highs.
“They could be much higher than they are today,” the chief executive officer of JPMorgan Chase & Co. told Bloomberg Television. “We may have gone from a saving glut to not enough savings.”
In the latest sign of how the war is impacting companies, Walmart Inc. warned rising fuel costs are squeezing its bottom line and could lead to higher prices for shoppers. With so much uncertainty on the geopolitical front, not even a solid outlook from Nvidia Corp. was able to buoy sentiment.
Corporate Highlights:
The Trump administration has agreed to award $1 billion to International Business Machines Corp. to build a foundry for producing quantum-computing chips, part of a broad strategy to bolster US leadership in an emerging industry. Anthropic PBC is in talks to rent Microsoft Corp. AI server chips, the Information reported, as the startup seeks to boost computing power and meet demand for its services. Ralph Lauren Corp. reported revenue and profit that beat analyst expectations, demonstrating the high-end apparel company’s momentum with consumers in the face of ongoing tariff uncertainty. Deere & Co.’s farm machinery sales stayed sluggish, raising questions on when the agriculture economy will start getting better. Nearly half of patients who got a high dose of Eli Lilly & Co.’s next-generation obesity shot lost the equivalent weight of bariatric surgery, further evidence that the treatment could be the company’s most potent weight-loss medicine yet. What Bloomberg Strategists say…
“The SPX sensitivity to oil is back to where it was a month ago, or even in early April during the early stages of the stock-market recovery.”
—Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 1:05 p.m. New York time The Nasdaq 100 fell 0.4% The Dow Jones Industrial Average fell 0.2% The MSCI World Index fell 0.1% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1594 The British pound fell 0.2% to $1.3407 The Japanese yen fell 0.2% to 159.16 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $77,160.93 Ether fell 0.4% to $2,126.18 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.60% Germany’s 10-year yield was little changed at 3.10% Britain’s 10-year yield declined two basis points to 4.97% Commodities
West Texas Intermediate crude rose 1.9% to $100.13 a barrel Spot gold fell 0.6% to $4,516.10 an ounce ©2026 Bloomberg L.P.
