Oil prices surged on Monday, with Brent crude climbing past $108 per barrel, as persistent Middle East supply risks and stalled diplomatic efforts between the United States and Iran kept energy markets on edge. The rally occurred even as global equities posted modest gains on tentative hopes for a potential diplomatic breakthrough.
Brent crude settled at $108.23 a barrel, up 2.75%, while U.S. West Texas Intermediate (WTI) rose 2.09 to $96.37. Traders remained focused on continued disruptions to shipping flows through the Strait of Hormuz, following U.S.-Israeli strikes on Iran two months ago.
Diplomatic Signals Fail to Calm Markets
Broader market sentiment improved slightly after the White House confirmed that President Donald Trump was reviewing a new Iranian proposal, first disclosed by Iranian sources. The proposal reportedly suggests postponing discussions on Iran’s nuclear program until after the war ends and disputes over Gulf shipping routes are resolved.
Mediators from Pakistan indicated on Monday that efforts to bridge gaps between Washington and Tehran remain ongoing. However, analysts cautioned that a resolution may still be distant.
“The market has come to the conclusion that there will be a resolution sooner or later,” said John Praveen, co-chief investment officer at Paleo Leon in Princeton. Still, he acknowledged that oil markets remained the main pressure point, with traders focused on the risk of prolonged disruption to energy flows from the Gulf.
Equities Mixed Amid Earnings and Data Week
On Wall Street, the Dow Jones Industrial Average fell 62.92 points, or 0.13%, to 49,167.79, while the S&P 500 rose 8.83 points, or 0.12%, to 7,173.91. The Nasdaq Composite gained 50.50 points, or 0.20%, to 24,887.10.
MSCI’s gauge of global stocks rose 2.32 points, or 0.22%, to 1,074.52. Earlier, the pan-European STOXX 600 index closed down 0.3%.
Investors are bracing for a heavy week of megacap earnings, economic data releases, and central bank decisions. Key data points include first-quarter U.S. economic growth and the March Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.
“We’re in this holding-on moment here. I don’t think the market’s going to grind a lot higher,” said Phil Blancato, chief market strategist at Osaic Wealth in New York. “The market is trying to hold on to its gains, waiting for more information to support where we’ve gone so far this year.”
Capital expenditure plans will be a key focus for tech giants Microsoft, Alphabet, Amazon, and Meta Platforms when they report quarterly results on Wednesday, with Apple scheduled to release results a day later.
Central Bank Meetings in Focus
In currency markets, the U.S. dollar slipped on Monday as investors remained on edge about the Middle East and a slate of central bank meetings this week. The dollar index fell 0.16% to 98.49, with the euro up 0.01% at $1.1721. Against the Japanese yen, the dollar strengthened 0.01% to 159.39.
Major central banks are expected to keep policy on hold this week, including the U.S. Federal Reserve. The Fed’s meeting, running Tuesday through Wednesday, will likely be the last with Jerome Powell as chair. The Bank of Japan is expected to keep its short-term policy rate steady at 0.75% on Tuesday, while the European Central Bank and Bank of England are also expected to maintain current policies.
In U.S. Treasuries, the yield on benchmark 10-year notes rose 2.5 basis points to 4.336%, while the 2-year note yield rose 2.3 basis points to 3.799%.
Gold Falls Amid Risk-On Sentiment
In precious metals, spot gold fell 0.62% to $4,679.09 an ounce, as investors shifted focus to riskier assets despite ongoing geopolitical tensions.
