Stocks Reach New Highs Despite Oil Spike and Stalled Iran Talks – US Market Wrap
A renewed rise in oil prices pushed bond yields higher after the US and Iran failed to reach an agreement to end the war, undermining hopes for a reopening of the Strait of Hormuz and reigniting inflation concerns.
US crude settled near $98 a barrel as traffic through the key shipping route remained heavily disrupted, reviving fears of broader energy shortages. Treasury yields climbed as markets continued scaling back expectations for Federal Reserve rate cuts this year amid the ongoing Middle East conflict. Despite the pressure from rising yields, a rally in semiconductor stocks lifted the S&P 500 to another record close, even though most of the index’s components declined.
Attention remained firmly on geopolitical developments. Reports indicated President Donald Trump met with his national security team to discuss next steps in the conflict, including the possibility of renewed military action as negotiations with Tehran remained deadlocked.
The ceasefire between the US and Iran appeared increasingly fragile after Trump described the agreement as being on “massive life support” and criticized Iran’s response to the latest US proposal. The conflict is also expected to feature prominently in discussions between Trump and Chinese President Xi Jinping later this week, particularly around Iran’s oil revenues and potential weapons exports.
Investors are also preparing for another key inflation report, with economists expecting US consumer prices to post another strong monthly increase following March’s sharp acceleration.
