Futures for the Dow Jones Industrial Average shed 452 points, or 0.9%, on Sunday night after President Donald Trump announced the U.S. Had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman. The move reignited fears of a broader conflict in the Middle East just as Wall Street was digesting a week of record gains driven by hopes for regional peace.
The seizure of the vessel, identified as the TOUSKA, followed Iran’s refusal to attend a U.S.-led peace summit in Pakistan and came amid conflicting signals about the status of the Strait of Hormuz. Iranian state media had declared the key shipping lane reopened earlier in the weekend, but by Saturday, traffic was again restricted, with Tehran accusing Washington of failing to uphold its obligations under a recent ceasefire with Lebanon.
Oil prices reacted sharply to the escalation. West Texas Intermediate crude futures jumped 8% to $90.54 per barrel, while international Brent advanced 6% to $96.50, reflecting renewed anxiety over potential supply disruptions from one of the world’s most critical energy chokepoints. The surge erased some of the gains from earlier in the week, when prices had eased on expectations of de-escalation.
Equity markets, which had climbed to all-time highs on optimism surrounding a possible détente, reversed course. The S&P 500 and Nasdaq-100 futures each lost about 0.8%, ending a remarkable streak for the tech-heavy index that had posted 13 consecutive winning sessions — its longest run since 1992.
“After the Nasdaq has rallied for 13 days in a row on hopes for a deal, we ended the week very overbought on a short-term basis,” said Peter Boockvar, chief investment officer at OnePoint BFG Wealth Partners. “And now the situation with Iran is gotten even more complicated and uncertain on when this conflict will end and when the Strait will fully reopen without fear of attack.”
The broader market pullback underscores how quickly geopolitical shocks can override bullish momentum, especially when markets are stretched. Traders now face a compressed week ahead, with earnings reports from Tesla, Intel, and United Airlines set to test whether corporate fundamentals can outweigh rising tension in the Gulf.
Why did oil prices rise despite mixed signals about the Strait of Hormuz?
Oil prices climbed given that the seizure of an Iranian vessel and threats to target energy infrastructure raised immediate fears of supply disruptions, even as conflicting reports emerged about whether the Strait of Hormuz remained open for commercial traffic.
How significant was the Nasdaq’s 13-day winning streak in historical context?
The Nasdaq Composite’s 13th consecutive winning session matched a streak not seen since 1992, highlighting how unusually strong the recent rally had been before the Iran-related reversal.
