Stock futures slipped Sunday night as Iran’s Revolutionary Guard boarded two container ships near the Strait of Hormuz, pushing Brent crude above $107 a barrel and West Texas Intermediate past $96 while global markets braced for a week of high-stakes earnings and central bank decisions.
The move came as President Trump scrapped plans to send envoys to Pakistan for Iran-related talks, declaring on Truth Social that negotiations could proceed by phone and asserting the U.S. Held all leverage in the stalled negotiations. Iran’s Foreign Ministry confirmed no meeting with Washington was currently planned, underscoring the diplomatic impasse.
Futures tied to the Dow Jones Industrial Average fell 0.2%, or 130 points, while S&P 500 and Nasdaq 100 contracts each declined about 0.3%, reflecting investor caution ahead of a pivotal week that includes earnings from five of the “Magnificent Seven” tech giants and the Federal Reserve’s policy decision on Wednesday.
Despite the geopolitical tension, April has delivered strong equity returns, with the S&P 500 up more than 9% and the Nasdaq surging over 15% month-to-date, extending a rally that defied earlier concerns about artificial intelligence spending and Middle East instability.
The upcoming Federal Reserve meeting is expected to be Jerome Powell’s final as chair before Kevin Warsh takes over in May, a transition made smoother by the Justice Department’s decision to drop its criminal probe into Powell, which led Senator Thom Tillis to lift his hold on Warsh’s confirmation.
This follows our earlier report, Stocks slip as U.S.-Iran ceasefire doubts rise, oil jumps on Strait of Hormuz fears.
Analysts note the current oil price spike mirrors the 2019 aftermath of the Abqaiq attack, when similar disruptions in Gulf shipping lanes triggered a temporary but sharp rally in crude markets before de-escalation efforts took hold.
How might the Strait of Hormuz disruption affect global supply chains beyond oil prices?
The disruption could delay shipments of non-oil goods moving through the strait, increasing costs for industries reliant on timely maritime logistics, though the current impact appears focused on crude flows as tankers remain the primary vessels affected.
Why are investors still bullish on equities despite rising geopolitical risks?
Investors remain bullish due to strong corporate earnings momentum, particularly from tech giants, and confidence that diplomatic channels remain open for de-escalation, even as tensions flare in critical shipping lanes.
