Oil rises 3% and stocks fall as tensions flare again over the Strait of Hormuz
The market moves followed Trump's announcement that the U.S. had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman
Michael M. Santiago / Getty Images
Oil prices rose and stock prices fell Monday after a weekend of escalating tensions between the U.S. and Iran, with the Dow Jones Industrial Average opened more than 200 points lower. Brent crude oil prices were up about 3% to $93 a barrel, while WTI crude was up more than 4% to $87 a barrel. The Dow Jones Industrial Average was down around 0.4%, while the S&P 500 is down around 0.22% and the Nasdaq fell 0.43%.
The market moves followed President Donald Trump's announcement Sunday that the U.S. had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman. Trump said in a Truth Social post that the vessel "is under U.S. Treasury Sanctions because of their prior history of illegal activity." Trump renewed his threats to target Iranian civilian infrastructure, including power plants and bridges, as a fragile ceasefire in the war is set to expire this week.
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The Strait of Hormuz, which Iran had declared "completely open" last Friday, was restricted again by Saturday. Tehran's state media attributed the renewed restrictions to American noncompliance with the ceasefire agreement, saying Washington had failed to meet its commitments. Trump has maintained that a U.S. blockade of Iranian ports along the strait would stay in place until Iran agreed to American demands.
U.S. negotiators are expected to travel to Pakistan for talks with Iran this week, though Tehran has cast doubt on its participation.
The market pullback reverses some of the momentum from last week, when both indexes posted strong weekly gains, with the S&P 500 up 4.5% and the Nasdaq Composite up 7.2%, both reaching all-time highs following a ceasefire between Iran and Lebanon. Friday also marked the Nasdaq's 13th straight day of gains — a run that hadn't been seen since 1992.
Earnings season picks up steam this week, with roughly one in five S&P 500 companies due to report results, among them Tesla, Boeing, Intel, and Lockheed Martin. Investors will also be watching Tuesday's Capitol Hill testimony from Kevin Warsh, Trump's nominee to lead the Federal Reserve.