Futures tied to major U.S. equity indices pointed slightly lower at the start of the week, as concerns over a potential U.S. naval blockade of the Strait of Hormuz and stalled negotiations between Washington and Tehran weighed on investor sentiment. Oil prices moved back above $100 per barrel, with markets increasingly uneasy about the durability of a fragile U.S.-Iran ceasefire. Meanwhile, earnings from Goldman Sachs (NYSE:GS) are set to kick off the U.S. reporting season, while LVMH (EU:MC) is also due to release results.
Futures drift lower
U.S. stock futures declined on Monday as investors reacted to renewed geopolitical risks following President Donald Trump’s warning that a blockade could be imposed on the Strait of Hormuz after weekend talks with Iran failed to produce a breakthrough.
As of 03:28 ET, Dow futures were down 239 points, or 0.5%, S&P 500 futures fell 40 points, or 0.6%, and Nasdaq 100 futures dropped 168 points, or 0.7%. Markets in Europe and Asia also showed signs of weakness, while oil prices surged and the U.S. dollar strengthened.
Wall Street had closed mixed on Friday, with investors taking a cautious stance ahead of high-stakes negotiations in Pakistan. Although a temporary two-week ceasefire was announced last week, uncertainty remains over whether it will lead to a lasting resolution.
Investors also digested data showing a sharp increase in consumer prices in March, largely driven by rising fuel costs linked to the energy shock triggered by the conflict. Oil prices have climbed significantly since late February, when tensions with Iran escalated and tanker traffic through the Strait of Hormuz—through which roughly 20% of global oil flows—was effectively disrupted.
Trump signals Hormuz blockade
On Sunday, Trump said the U.S. Navy would launch an “immediate” blockade of the Strait to restrict shipping activity.
He warned that any vessel paying fees imposed by Tehran would not be guaranteed “safe passage on the high seas.”
Later, the Pentagon clarified that the restrictions would target ships “entering or departing Iranian ports or coastal areas,” while allowing other vessels to continue transiting the Strait.
The escalation follows 21 hours of negotiations between U.S. and Iranian officials in Pakistan, which ended without an agreement to extend the ceasefire. Vice President JD Vance, who led the U.S. delegation, said Iran had rejected demands to halt its nuclear ambitions. Tehran has not immediately commented, though Pakistan—acting as mediator—urged both sides to “uphold their commitment to ceasefire.”
Oil climbs back above $100
Crude prices surged again on Monday, reclaiming the $100 per barrel level.
Brent crude rose 6.7% to $101.65, while U.S. West Texas Intermediate gained 7.1% to $103.42.
Despite the sharp move, analysts at Pepperstone said the market reaction had been “relatively contained,” suggesting that traders may see the blockade as a negotiating tactic.
“While it’s clearly a risk-averse start to the trading week, […] the general market reaction can be summed up as ‘could be worse’,” said Michael Brown, Senior Research Strategist at Pepperstone.
Oil had briefly dipped below $100 last week after the ceasefire announcement, which followed Trump’s warning that Iran’s “civilization” could be destroyed if the Strait was not reopened. Even so, prices remained elevated compared with pre-conflict levels.
Goldman Sachs results ahead
Attention now turns to earnings from major U.S. banks, beginning with Goldman Sachs’ quarterly results before the market open.
Shares of Goldman have risen about 3% so far this year, supported by strong trading activity as investors reposition portfolios amid disruption from emerging artificial intelligence technologies. Investment banking revenues have also shown resilience.
However, developments in Iran may overshadow the results. While volatility can boost trading income, sustained high commodity prices could deter companies from pursuing costly deals such as mergers and acquisitions, potentially weighing on advisory revenues.
Other major banks set to report this week include JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS).
LVMH set to report
LVMH (EU:MC), the world’s largest luxury goods company and owner of brands such as Louis Vuitton and Dior, is due to publish its first-quarter sales later today, with the Middle East conflict expected to feature prominently in its outlook.
According to Reuters, luxury sales in key regional hubs like Dubai and Abu Dhabi have declined due to the ongoing conflict, impacting companies including LVMH as well as peers like Kering SA (EU:KER) and Hermès (EU:RMS).
At Dubai’s Mall of the Emirates, luxury sales reportedly dropped by as much as 50% in March, while foot traffic at Dubai Mall saw a similar decline. In Abu Dhabi’s Galleria mall, overall sales were down by around 10%.
Although the Middle East represents a relatively small portion of LVMH’s total revenue, analysts cited by Reuters suggest that the impact on profitability—reported on a half-year basis—could be more significant.