Wall Street entered Monday on shaky footing but not quite in panic mode.
The Dow Jones Industrial Average fell 250 points, or 0.5%, at the open. The S&P 500 and Nasdaq Composite were both down 0.2%, reflecting a cautious start rather than a sharp selloff.
By the time the cash market opened, losses from futures had narrowed because an hour ago, Dow futures were down as much as 500 points.
After Donald Trump ordered a naval blockade of the Strait of Hormuz, Oil prices have surged again.
Brent crude rose as much as 9% to near $104 per barrel before easing slightly, while West Texas Intermediate crossed $104 and held gains of around 7%–8%.
The latest tensions follow the collapse of talks in Islamabad. Vice President JD Vance exited negotiations, citing Iran’s refusal to curb its nuclear programme. Iran, in response, pushed for control of the strait, war reparations, and access to frozen assets.
Trump’s directive to begin a naval blockade from 10 a.m. ET with allied support marked a further escalation. Iran termed the move “an act of piracy” and warned of potential retaliation targeting Persian Gulf ports.
Even if the ceasefire holds, the economic effects are likely to persist. Higher energy prices and supply disruptions could continue to weigh on inflation and growth. As economists at Bank of America note, a return to pre-war conditions appears unlikely in the near term.
Yet, the market remains relatively strong if we take a broader time frame. As per a Reuters report, US oil prices have climbed more than 70% over the past year, while inflation continues to stay above 3%. Despite this, equity markets have shown limited reaction.
Even after the escalation in late February, the Nasdaq is still trading above its pre-war levels, with the S&P 500 not far behind. Last week’s ceasefire supported that trend, with the S&P 500 rising 3.6%, the Nasdaq gaining 4.7%, and the Dow adding 3%.
On the earnings front, the consensus estimates point to 13.9% year-on-year earnings growth for the first quarter. Forecasts for the remaining quarters (around 20% to 22%) suggest a robust outlook, potentially marking the strongest annual growth since 2018, excluding the pandemic rebound.
This resilience partly reflects how markets have absorbed multiple shocks over the past year, supported by optimism around corporate earnings and AI-led growth.
Attention now shifts to earnings. Goldman Sachs is set to report Monday, followed by JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley and Bank of America later this week.
