By Dow Jones Newswires Staff
Oil jumped back above $100 as U.S. bonds and stock futures fell after weekend peace talks between the U.S. and Iran broke up without resolution.
Market optimism that had lifted stocks late last week unwound on further damage to an already fragile cease-fire. President Trump said that a U.S. blockade on vessels entering or leaving Iranian ports would take effect at 10 a.m. Eastern Daylight Time.
U.S. Treasurys fell and Japan's benchmark government bond yield jumped to a near 30-year high. Hungarian assets rallied amid losses elsewhere in Europe following the election win of Peter Magyar.
Traders will look to major bank earnings for a clear indicator of how conflict in the Middle East is affecting corporate performance. Goldman Sachs reports ahead of the opening bell Monday, before J.P. Morgan, Citigroup and others report Tuesday.
--In early European trading on Monday, Brent crude gained 6.8% to $101.7 a barrel, while West Texas Intermediate rose 7.2% to $103.55 a barrel. Natural-gas prices also jumped, with the front-month Dutch TTF contract--the European benchmark--up 9% to 47.58 euros a megawatt-hour.
"High stakes negotiations between the U.S. and Iran deadlocked over Washington's zero uranium enrichment demand, setting the stage for further escalation in the six-week war and prolonged supply disruptions in advance of summer driving season," said Helima Croft, head of global commodity strategy at RBC Capital Markets.
--U.S. equity indexes all fell premarket as the collapse of peace talks dashed optimism that had pushed stocks to their best one-week performance since November last year. Futures for the S&P 500 were down 0.6%, while the Dow Jones Industrial Average fell 0.5%. The tech-heavy Nasdaq was 0.7% lower premarket and on track to end an eight-day winning streak.
--Stock markets across Asia fell, with Japan's Nikkei Stock Average losing 1.0%, South Korea's Kospi dropping 1.2% and Australia's S&P/ASX 200 benchmark index shedding 0.5%. China's Shanghai Composite Index edged 0.1% higher.
Shipping and airline stocks were major decliners in Asia. Cathay Pacific Airways fell 2.7% and China Eastern Airlines declined 4.1%. Cosco Shipping Energy Transportation shed 4.9% in Shanghai and Hanwha Ocean was down 2.7% in Seoul.
--European blue-chip indexes fell sharply at the open. Banks and consumer-sensitive stocks slide as the Europe-wide Stoxx 600 moved 0.8% lower. The German DAX slid 1% as Commerzbank fells 2.6% while energy-sensitive Siemens Energy was 2.2% lower.
In Paris, falling luxury stocks dragged the CAC 40 down 1% with Gucci-owner Kering sliding 3%. London's FTSE 100 was 0.55% lower, as gains for oil majors cushioned losses for miners. Banks pushed the Italian FTSE MIB and the Spanish IBEX 35 down 0.7% and 1.15%, respectively.
--The dollar rose slightly. The market reaction was limited which indicates many are still hoping for a de-escalation in the conflict, Commerzbank's Thu Lan Nguyen says in a note. The DXY dollar index rose 0.3% to 98.976.
--U.S. Treasury yields rose in Asian trade. The rise in yields was slightly more pronounced in shorter- and medium-term yields than on the long end of the curve, even as money markets priced in a status quo by the Federal Reserve for several meetings. "Currently, the bond market is telling us that the Fed will continue to 'talk tough' around inflation, but is unlikely to back that rhetoric with meaningful action," Janus Henderson Investors' John Kerschner said in a note. The two-year Treasury yield was up 3.4 basis points at 3.833%, the 10-year yield rose 3 bps to 4.346% and the 30-year was up 2.3 bps at 4.936%.
Eurozone bond yields rose in tandem with their U.S. peers. Meanwhile, the yield on 10-year Japanese government bonds rose to 2.490%, its highest level since June 1997.
--Bitcoin retreated below $71,000 as geopolitics and rate expectations dampened the relief rally. There isn't a sufficiently strong market foundation to maintain an uptrend, XS.com's Linh Tran said. Bitcoin was down 0.7% at $70,853.
--New York gold futures were down 0.8% to $4,748.70 a troy ounce. Silver fell 2.5% to $74.57 an ounce, while platinum was down 0.7% to $2,051.60 an ounce.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
04-13-26 0432ET
