Markets Recoil as Renewed U.S.–Iran Tensions Reverse Risk Sentiment

index Update
U.S. equities closed at record highs on Friday, with the S&P 500, Nasdaq 100, and Dow Jones advancing 1.2%, 1.5%, and 1.9%, respectively. The rally was driven by Iran’s decision to reopen the Strait of Hormuz to non-Iranian vessels, easing fears of energy-led Stagflation and triggering a sharp decline in oil prices. Improved risk appetite supported gains in AI-linked stocks, although Netflix declined following weaker-than-expected guidance. The major indices remained on track for a third consecutive week of gains exceeding 3%.

Market Movers
Among individual stocks, Energy Focus, Inc. surged 210.53%, while Forum Markets, Incorporated rose 81.01%, emerging as the top gainers. On the downside, LanzaTech Global, Inc. fell 37.13%, and Julong Holding Limited declined 34.67%, making them the session’s biggest laggards.

Commodities Update
Oil prices rebounded sharply on Monday, with Brent Crude rising over 5% above $95 per barrel and WTI climbing more than 6% toward $89. The surge followed renewed geopolitical tensions between the U.S. and Iran, including reports of a U.S. naval seizure of an Iranian-flagged vessel and retaliatory actions by Tehran. These developments disrupted earlier ceasefire optimism, raising concerns over prolonged Supply constraints, elevated Inflation, and a potential global economic slowdown.
In contrast, precious metals declined, with gold falling over 1% below $4,800 per ounce and silver dropping nearly 2% toward $79. The rise in oil prices intensified Inflation concerns and reinforced expectations of further monetary tightening, weighing on gold and silver, which remain significantly lower since the onset of the conflict.

Macro Updates
The U.S. dollar strengthened, with the dollar index rising to around 98.3 as safe-haven Demand increased amid escalating geopolitical tensions. Persistent energy Supply risks have further elevated Inflation expectations, supporting a higher-for-longer Interest Rate outlook and diminishing expectations of Federal Reserve rate cuts in 2026.

Bonds Commentary
U.S. Treasury yields moved higher, with the 10-year Yield rising to approximately 4.27%. The increase reflects heightened Inflation concerns linked to energy market disruptions, reinforcing expectations of sustained monetary tightening and reducing the likelihood of policy easing by the Federal Reserve this year.

Futures Update
U.S. stock futures traded lower on Monday, with Dow futures declining 0.6%, S&P 500 futures falling 0.5%, and Nasdaq 100 futures also down 0.5%, as renewed tensions between the U.S. and Iran weakened sentiment and clouded prospects for stability in the Strait of Hormuz.

Stocks extended their strong upward momentum on Friday, with sharp gains pushing both the Nasdaq and the S&P 500 to fresh record closing highs, while the Dow posted its best close in nearly two months. The S&P 500 climbed 84.76 points (1.20%) to settle at 7,126.05. However, geopolitical tensions may weigh on sentiment, as the next round of Middle East talks has been put on hold following the U.S. seizure of an Iranian-flagged cargo ship, with Tehran indicating no immediate plans to resume discussions. In light of these developments, along with the current technical setup, the S&P 500 could see near-term profit booking and a move to Fill price inefficiencies. The 14-period RSI also remains in overbought territory, signaling caution and the possibility of a pause in upward momentum. Immediate resistance is seen near 7,200, while support is placed around 6,955.