Markets were on edge on Monday as peace talks between the US and Iran stalled.
Oil prices saw a big spike early in the day on news that Iran’s negotiators have stopped working with the US, with the nation planning to again block all traffic through the Strait of Hormuz in response to Israel’s attacks against Hezbollah in Lebanon.
The moves reversed slightly in the afternoon after President Donald Trump assured markets that talks with Iran were going forward at a “rapid pace” in a post on Truth Social.
Speaking to CNBC, the president said that Iran has not told him they were backing out of negotiations.
“I don’t care if they’re over, honestly,” Trump said.
Brent crude, the international benchmark, jumped as much as 7% Monday morning, before paring its gains to trade around $95 a barrel. West Texas Intermediate crude also surged as much as 8% before falling back to $92 a barrel.
Bond yields rose and stocks intially dropped on the news before reversing The 10-year US Treasury yield jumped as much as five basis points before falling back to 4.43%, and the 30-year bond yield rose two basis points before falling back below the 5% threshold.
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Here’s where US indexes stood around 3:00 p.m ET on Monday:
The news that Iran has stopped negotiating with the US, which was reported by Iran’s state media, initially dispelled any lingering optimism among investors that the two sides are close to a peace deal. The ceasefire between the two has frayed amid tit-for-tat exchanges by both sides, as well as the US’s ongoing blockade of Iranian vessels and operations in the Strait of Hormuz.
Over the weekend, the US said it bombed Iranian radar and drone command and control sites after Iran shot down an American MQ-1 Predator drone. On Monday, Iran fired two ballistic missiles at US bases in Kuwait that were stopped by air defenses. And Israel has expanded its operations against Hezbollah in Lebanon in recent days, including strikes in Beirut.
Iranian foreign minister Seyed Abbas Araghchi accused the US and Israel of violating the ceasefire on X, writing, “The United States and Israel bear responsibility for the consequences of any breach of the truce.”
Prior to Monday’s fresh spike, oil prices had cratered by 20% from their wartime peaks, falling sharply last week as US President Donald Trump teased his sign-off on a deal to extend the ceasefire while talks continued. In recent days, Trump has also introduced tougher terms for an agreement between Washington and Tehran.
In a post on Truth Social Sunday evening, Trump again indicated a “good” deal was coming, lashing out at criticisms of how the war has been handled.
“It is MUCH tougher for me to properly do my job and negotiate, when political hacks keep negatively ‘chirping,’ at levels never seen before, over and over again, that I should move faster, or move slower, or go to war, or not go to war, or whatever. Just sit back and relax, it will all work out well in the end – It always does!” Trump wrote.
When asked to comment on negotiations, the White House directed BI to Trump’s Truth Social post Monday afternoon, which said that talks with Iran were continuing.
The brief spike in bond yields is a sign that investors remain wary about the outlook for inflation, particularly if a peace deal with Iran is further pushed out. Last week’s inflation update was in line with expectations, but broadly showed inflation is still moving higher and will be an issue for the Federal Reserve as it gets ready for its policy meeting later this month.
The stock market was also buoyed somewhat by the strong gain in Nvidia shares, which rallied on news that the tech titan is getting into the PC chip game.
Shares advanced 4% on the news, while PC hardware rivals AMD and Intel slumped. The sector still remains on its historic rally, with the iShares Semiconductor ETF up almost 90% year to date.
Other notable moves in the sector:
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