Washington, United States. Oil prices rose and US stock futures fell on Monday as tensions over a seized Iranian cargo ship raised doubts about a Middle East ceasefire, while Asian equity markets largely held firm.
Oil and equity markets react to renewed tensions
Brent crude futures rose around 6% to $95.36 a barrel. S&P 500 futures fell 0.6% and European futures declined 1.2%.
Equity benchmarks in Seoul, Taipei and Tokyo advanced, with Hong Kong’s Hang Seng up 0.7%, Japan’s Nikkei climbing 0.8% and South Korea’s KOSPI rising 1%. Taiwan’s shares touched a record high.
Ceasefire questioned after ship seizure and new threats
The ceasefire in the Iran war, due to run until Tuesday, was thrown into question after the United States seized an Iranian cargo ship and Tehran’s military command vowed to retaliate.
Iran also rejected a new round of peace talks, its state news agency reported, hours after President Donald Trump said he was dispatching envoys to Pakistan and threatened fresh strikes if Tehran did not accept his terms.
Traders watch for escalation but remain cautious
Despite the worsening diplomatic outlook, some traders remained cautiously optimistic. “The headlines look bad; it looks like there’s disagreement, which has led to a little bit of re-escalation,” said Damien Boey, portfolio strategist at Wilson Asset Management in Sydney. “But I think, ultimately, both sides want to be able to do a deal — that’s part of the reason why the market’s optimistic and not selling off too much.”
Strait of Hormuz traffic monitored amid de facto closure
Iran has reimposed its de facto closure of the Strait of Hormuz, though Kpler data showed more than 20 vessels carrying oil products, metals, gas and fertiliser passed through on Saturday, the busiest day for the chokepoint since 1 March.
“The critical barometer of geopolitical risk has been distilled into one data point: the number of ships transiting the Strait of Hormuz,” said Bob Savage, head of markets macro strategy at BNY.
Bank warning, bonds, currencies and earnings in focus
Australia’s National Australia Bank flagged a $500 million impairment charge, citing expectations that the war would drive up bad debts. Its shares fell 3.6%.
Bond markets retreated after Friday’s rally, with the yield on benchmark 10-year US Treasuries rising 2.2 basis points to 4.266%. The dollar steadied after two weeks of selling pressure, buying 158.8 yen and trading at $1.1760 per euro.
Wall Street indices touched record highs on Friday, supported by expectations of strong first-quarter earnings, with most reports due this week.
UK politics: Starmer set to address parliament
British Prime Minister Keir Starmer was set to address parliament on Monday, facing calls for his resignation over his handling of the appointment of Peter Mandelson as US ambassador despite Mandelson having failed a vetting process.
What developments will you be watching most closely as the ceasefire deadline approaches?