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(NEW YORK) — Stocks closed slightly lower and oil prices rose on Monday as tensions mounted in the Strait of Hormuz, putting pressure on the ceasefire between the U.S and Iran a day before it’s set to expire.
The Dow Jones Industrial Average ticked down 4 points, or 0.01%, while the S&P 500 dipped 0.2%. The tech-heavy Nasdaq declined 0.2%.
U.S. Marines seized an Iran-flagged container ship in the Gulf of Oman on Sunday, according to CENTOM, just a day after two Indian ships came under fire in the Strait of Hormuz.
A potential second round of peace talks between the U.S. and Iran remained in doubt on Monday. Iranian Foreign Ministry spokesperson Esmaeil Baghaei said Monday that Iran has not yet made any decision regarding additional talks.
West Texas Intermediate futures, the benchmark index for U.S. oil prices, climbed more than 5% on Monday, registering at about $88 a barrel. U.S. oil prices stand about 35% higher than before the war.
The escalating tensions appeared to undo a brief thaw on Friday, when a senior Iranian official declared the strait “completely open” for tanker traffic. Within minutes, President Donald Trump celebrated the announcement as a major breakthrough.
The glimmer of relief for the critical waterway sent stock prices soaring and oil prices plummeting on Friday.
Markets have swung dramatically over the weeks following the start of the U.S.-Israel attacks on Iran on Feb. 28, as investors weathered a historic global oil shock and digested mixed signals from Trump.
Stocks have moved higher on a largely consistent basis in April, however, in response to an apparent willingness on the part of both sides to end fighting and negotiate a temporary truce.
The U.S. continues to mount a naval blockade of Iranian ports in the Strait of Hormuz, exerting pressure on Tehran by choking off a key source of revenue.
Last week, the commander of the Khatam Al-Anbiya Central Headquarters of Iran’s armed forces said the U.S. blockade of Iranian ports is a “violation of the ceasefire,” in a statement published by the official Islamic Republic News Agency.
The war prompted Iran’s effective closure of the Strait of Hormuz, a vital maritime trading route that facilitates the transport of about one-fifth of the global supply of oil and natural gas.
The disruption amounted to the “most severe oil supply shock in history,” the International Energy Agency (IEA) said in a report last week. Oil and gasoline prices soared, prompting some economists to warn of a possible recession.
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