U.S. stock futures fell early Monday morning as global markets reacted to President Trump’s order to block the Strait of Hormuz. The move came after weekend peace talks in Islamabad failed, raising fears of a longer conflict and a sharp rise in energy prices.
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In a post on Truth Social, Trump said the U.S. Navy would begin blocking ships entering or leaving the Strait of Hormuz. He added that other countries would join the effort and accused Iran of using the route for “illegal extortion.”
The collapse of talks in Islamabad has increased fears that tensions between the U.S. and Iran could drag on. This has already pushed oil prices sharply higher, adding pressure on the global economy. The international oil benchmark Brent (CM:BZ) rose 6.38% to $101.3 per barrel, while West Texas Intermediate (WTI) crude (CM:CL) gained 6.75% to $103.06 per barrel.
Wall Street had just wrapped up a strong week, as optimism around a temporary ceasefire lifted markets and helped all three major indexes post solid gains, with the S&P 500 up 3.6%, the Nasdaq rising about 4.7%, and the Dow gaining 3%.
Now, investor focus is also turning to earnings. The first-quarter reporting season begins this week, led by major banks. Goldman Sachs (GS) is set to report on Monday, followed by Citigroup (C), Wells Fargo (WFC), JPMorgan Chase (JPM), Morgan Stanley (MS), and Bank of America (BAC) later in the week.