Global investors held their breath on Monday as US stocks edged higher and oil prices fluctuated, with markets increasingly anxious over Washington’s next move in the escalating conflict with Iran.
Fragile gains on Wall Street
US equity markets showed only tentative movement on Monday, while oil prices swung between gains and losses ahead of a deadline set by US President Donald Trump for potential strikes on Iranian power infrastructure. Across the globe, investors remained on edge: the next step taken by Washington could shape not only the trajectory of energy markets but also the stability of the wider global economy.
The S&P 500 rose by 0.4%, marking its first gain in six weeks. The Dow Jones Industrial Average added 109 points, or 0.2%, with an hour of trading remaining, while the Nasdaq Composite climbed 0.5%. These modest increases, however, mask a deeply unsettled market, where any abrupt shift could trigger a fresh wave of selling.
Oil markets caught in geopolitical crosscurrents
Oil prices fluctuated amid persistent uncertainty over the conflict with Iran and how long it might continue to disrupt global flows of crude and natural gas. On Monday, Iran rejected the latest ceasefire proposal, instead calling for a definitive end to the war, though negotiations may not have collapsed entirely.
“We will not simply accept a ceasefire,” Mojtaba Ferdowsi Pour, head of Iran’s diplomatic mission in Cairo, told the Associated Press. “We will only accept an end to the war with guarantees that we will not be attacked again.”
Meanwhile, hostilities continued, including an Israeli strike on an Iranian petrochemical facility. In the background, the clock continues to tick towards a deadline repeatedly extended by Trump, who has threatened to target Iranian infrastructure if Tehran does not reopen the Strait of Hormuz.
In peacetime, roughly a fifth of global oil supply passes through the strait. Its disruption has already driven up energy prices and raised concerns over supply chains worldwide. Over the weekend, Trump escalated his rhetoric on social media, warning Iranian leaders that Tuesday would mark a decisive moment and threatening severe consequences.
Rising fuel costs strain economies
Monday also marked the first opportunity for markets to respond to Friday’s US labour report, which showed employers added more jobs than expected, though the figures still fell short of economists’ forecasts. The unemployment rate unexpectedly declined, offering some reassurance for an economy grappling with a sharp rise in petrol prices since the outbreak of war.
The national average price for a gallon of regular petrol has climbed to nearly $4.12, compared with under $3 just days before the conflict began in late February. The impact has been even more severe for countries with lower domestic oil production, as they rely heavily on Middle Eastern supplies—many of which have been disrupted.
Energy shock ripples through global markets
Although the United States is a major producer, it is not immune to the pressure: global energy markets are tightly interconnected, and shortages in one region inevitably push up prices elsewhere. Benchmark US crude rose 0.8% to $112.41 per barrel, recovering earlier losses. Brent crude, the international standard, also gained 0.8% to $109.77 per barrel—well above its pre-war level of around $70.
Analysts warn that if Trump follows through on his threats to strike Iranian power plants, prices could surge dramatically, particularly if Tehran retaliates by fully blocking the Strait of Hormuz.
Tech stocks mixed as banks outperform
On Wall Street, mixed performance among major technology stocks limited broader gains. Apple rose 1.3% and Amazon added 1.2%, while Tesla fell 2.6% and Microsoft slipped 0.3%. Banking stocks were among the strongest performers, with JPMorgan Chase up 1.5%.
In his annual letter to shareholders, published on Monday, chief executive Jamie Dimon said the US economy remained resilient and business conditions broadly healthy. However, he cautioned that asset prices are elevated, meaning any disappointment could have an outsized impact on global markets.
In the bond market, Treasury yields were relatively stable, with the yield on the 10-year note at 4.33% — still significantly higher than the 3.97% seen before the conflict. The increase has pushed up borrowing costs for mortgages and other loans, weighing on economic activity. For millions of Americans, this translates into more expensive housing, cars and education.
Inflation risks complicate Fed’s path
A report released on Monday showed that US service sectors, including finance and transport, expanded for a 21st consecutive month in March. However, growth was slightly weaker than expected, while price pressures accelerated to their highest level since 2022, potentially complicating the inflation outlook.
The Federal Reserve, already navigating a difficult balance between curbing inflation and supporting growth, must now contend with a geopolitical factor largely beyond the reach of monetary policy.
In overseas markets, Japan’s Nikkei 225 rose 0.5%, while South Korea’s Kospi jumped 1.4%. Many other exchanges across Europe and Asia remained closed for holidays, reducing liquidity and amplifying volatility. When they reopen, they are likely to face the same dilemma confronting US traders: whether to buy, sell, or simply wait.
