Stocks Fall, Oil Rises on Mideast Tension Flare-Up: Markets Wrap
(Bloomberg) — Stocks fell from all-time highs as oil climbed on concerns that heightened Middle East tensions could threaten a fragile ceasefire, keeping energy costs elevated while fueling inflation risks.
Following its longest weekly advance since 2024, the S&P 500 retreated. Iranian missiles targeted the United Arab Emirates while Tehran warned that it was tightening its grip on the Strait of Hormuz. Brent crude jumped to around $114. With oil prices not far from a four-year peak and recent data pointing to a still resilient US economy, Treasury yields rose.
The United Arab Emirates said its systems were responding to missiles coming from Iran and also said its oil industrial zone in Fujairah was on fire, in one of the first hits to energy infrastructure in almost a month. A tanker was struck by Iranian drones outside the Strait of Hormuz.
A plan announced by President Donald Trump to help vessels through the Strait of Hormuz left shipping executives perplexed, as attacks continued and traffic remained at a near standstill. The US denied a report by Iranian media that the country had struck an American naval vessel with missiles.
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.”
“We continue to think 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:
US transportation stocks slipped after Amazon.com Inc. announced expanded logistics offerings that will turn it into a major competitor for parcel carriers and air freight companies, and also impact truckers and third-party brokers. 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…
“Equity markets in particular have felt safe in ignoring the Middle East stuff in recent weeks. The spike in crude futures has provided at least a temporary warning that negative tail risks still lurk somewhere.”
—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 0.4% as of 11:42 a.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 0.8% The Stoxx Europe 600 fell 1% The MSCI World Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1699 The British pound fell 0.4% to $1.3533 The Japanese yen fell 0.1% to 157.20 per dollar Cryptocurrencies
Bitcoin rose 1.1% to $79,780.95 Ether rose 0.9% to $2,349.63 Bonds
The yield on 10-year Treasuries advanced seven basis points to 4.44% Germany’s 10-year yield advanced five basis points to 3.08% Britain’s 10-year yield declined five basis points to 4.96% Commodities
West Texas Intermediate crude rose 3.6% to $105.57 a barrel Spot gold fell 1.7% to $4,535.71 an ounce ©2026 Bloomberg L.P.
