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Stock futures dipped Sunday as investors were forced to confront the inconvenient reality that the Strait of Hormuz remains closed with oil markets edging closer to a cliff’s edge.
Futures tied to the Dow Jones industrial average fell 174 points, or 0.35%. S&P 500 futures were down 0.26%, and Nasdaq futures lost 0.32%.
U.S. oil futures rose 1.75% to $107.26 a barrel, while Brent crude climbed 1.32% to $110.70. Gold fell 0.37% to $4,545 per ounce.
The U.S. dollar was up 0.09% against the euro and up 0.06% against the yen. The yield on the 10-year Treasury climbed 1.6 basis points to 4.611%.
Last week’s euphoria came to screeching halt on Friday, when the U.S.-China summit failed to produce a breakthrough that would reopen the strait and allow oil supplies to flow again.
Given the fading hopes that energy-fueled inflation will come back down soon, bonds sold off sharply, with U.S., German, Japanese, and U.K. yields all soaring while stocks tumbled. For the first time in two decades, the 30-year Treasury yield hit 5% as Wall Street priced in greater odds for rate hikes.
At the same time, talks between the U.S. and Iran have stalled, keeping the strait shut. Frustrated that the diplomatic channel remains in limbo, President Donald Trump is weighing his military options.
English (US) ·