Wall Street Trades Mixed as Hormuz Blockade Begins
U.S. stock markets traded mixed on Monday, recovering from early losses as investors reacted cautiously to President Donald Trump’s announcement that a blockade of the Strait of Hormuz had officially started. The move followed failed weekend negotiations between the United States and Iran.
Major Indexes Show Diverging Performance
At midday trading, the S&P 500 remained largely unchanged at 6,818 points, while the NASDAQ Composite gained 0.3% to 22,964. Meanwhile, the Dow Jones Industrial Average declined 0.6% to 47,651, reflecting uneven sentiment across sectors.
Markets had already closed mixed on Friday, as traders remained cautious ahead of high-stakes diplomatic talks between Washington and Tehran.
Inflation Data Adds to Market Pressure
Investor sentiment was also influenced by recent economic data showing a sharp rise in U.S. consumer prices in March. The increase was largely driven by higher gasoline costs linked to the ongoing conflict, intensifying concerns about inflation.
Oil Prices Surge Above $100 Again
Crude oil prices jumped back above $100 per barrel, fueled by fears of supply disruptions through the Strait of Hormuz, a key global oil transit route handling nearly 20% of worldwide supply.
Brent crude rose over 7% to $101.93, while U.S. West Texas Intermediate (WTI) climbed 6.7% to $103.00.
Blockade Details and Market Interpretation
President Trump confirmed that the blockade took effect at 10:00 ET, aiming to restrict vessels linked to Iranian ports. However, U.S. officials clarified that neutral ships not connected to Iran would still be allowed safe passage through the strait.
Despite the escalation, analysts suggested that markets have reacted relatively calmly, with some viewing the move as a strategic negotiating tactic rather than an immediate escalation toward broader conflict.
Failed Talks Heighten Uncertainty
The blockade follows 21 hours of negotiations between the U.S. and Iran that ended without agreement. Key disputes included Iran’s nuclear program and regional influence.
Although diplomatic channels remain open, uncertainty continues to weigh on global markets.
Rate Cut Expectations Decline
Rising oil prices and inflation concerns have led investors to reduce expectations for Federal Reserve rate cuts in 2026. Markets now price in only a 16% chance of a rate reduction at the Fed’s December meeting, down from 21% previously.
Higher interest rate expectations typically create headwinds for equities and risk assets.
Goldman Sachs Kicks Off Earnings Season
The U.S. banking earnings season began with strong results from Goldman Sachs. The bank reported a 19% increase in quarterly profit, supported by robust trading activity and dealmaking.
Revenue rose 14% to $17.23 billion, while earnings per share of $17.55 exceeded expectations.
Other major banks, including JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, and Morgan Stanley, are set to report later this week.
