Oil Rises, US Futures Weaken as US–Iran Talks Stall
Oil prices rose at the start of the week while US stock futures weakened, after efforts to resume US–Iran peace talks stalled again and the effective closure of the Strait of Hormuz was extended. This uncertainty weighed on risk sentiment as markets reassessed the impact of energy supply disruptions from the Middle East.
Brent rose about 2% to above $107 per barrel, while WTI gained 1.8% to $96.14. Meanwhile, S&P 500 futures fell 0.2% after the benchmark index closed at a record on Friday, while the dollar strengthened against most major currencies and risk-sensitive currencies weakened.
In the bond market, Treasuries weakened slightly and the 10-year US yield rose 2 bps to 4.33%, after the Justice Department dropped its investigation into the Federal Reserve. Gold fell 0.7% to around $4,675 per ounce, reflecting a combination of a stronger dollar and the market's focus on inflation risks from energy.
This shift in sentiment comes after talks stalled again over the weekend, when Trump canceled his envoy's trip and Tehran declared it would not negotiate under threat. Although global equities have recovered most of their war-related declines and returned to record levels, the rally is now entering a testing phase with policy decisions from the Fed and ECB this week, as well as earnings reports from major technology companies.
Market participants believe the "war trades" are back in full swing, but not with full conviction, as some investors still hope the ceasefire will hold and negotiations will eventually progress. However, the combination of higher oil prices and inflation concerns keeps the market sensitive to headlines, especially ahead of a series of central bank decisions starting Tuesday, including from the Bank of Japan. (asd)
Source: Newsmaker.id*
