Oil Up, Stock Futures Slip as Iran Offer Rejected: Markets Wrap

Oil advanced and US equity futures slipped after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, while saying negotiations may resume this week.

Futures for the S&P 500 Index declined around 0.2% in early Asian trading after the underlying gauge rose 0.5% on Friday. Benchmark Brent crude climbed 1.5%, while the dollar edged higher against most major currencies.

Iran stuck to its proposal to reopen the crucial Strait of Hormuz within seven days, saying it won’t soften its conditions. Trump said he expects negotiations to resume this week despite rejecting Tehran’s latest offer, Axios reported. He also said he’s thinking “very seriously” about a ban on diesel exports.

Oil remains a key driver for markets as elevated energy costs add to inflation pressures and bolster expectations for further interest-rate increases. The average yield on a gauge of global bonds has climbed above 4% for the first time since 2007, raising concerns that higher borrowing costs may eventually weigh on company earnings.

“Geopolitical developments over the weekend are likely to keep volatility elevated across global markets,” Nick Twidale, chief market analyst at AT Global Markets, wrote in a note to clients.

Volatility may persist this week, with the Federal Reserve’s preferred inflation gauge and US jobs reports set to shape expectations for at least one more rate increase this year.

Several Fed officials have pointed to resilient economic growth and a strong labor market as reasons further tightening may be needed. Cleveland Fed President Beth Hammack said those factors, along with concerns about government debt, are helping drive long-term Treasury yields higher. Traders are fully pricing at least one more 25 basis-point hike before year-end.

Treasury Secretary Scott Bessent struck a more dovish tone, saying policymakers should keep an “open mind” on rates as productivity gains from artificial intelligence and deregulation may help contain inflation.

The Bond Market Is Getting Closer to Sounding Alarm on EconomyEmerging Market Investors Shun Riskiest Bonds as US Yields SoarAI Whiplash Jolts Stocks as Sentiment Lurches From Fear to Greed

Elsewhere, Trump was set to have dinner with Anthropic PBC Chief Executive Officer Dario Amodei on Sunday, where he planned to discuss the tech chief’s recent calls for slowing the development of new AI models.

“We’re going to talk about it,” Trump told a reporter on the sidelines of a golf tournament near Chicago. “I’m for, ‘Let’s go and let’s win.’”

Corporate Highlights:

South Africa’s Gold Fields Ltd. has expressed interest in acquiring Northern Star Resources Ltd., according to people with knowledge of the matter, a potential blockbuster deal that would deepen the miner’s bet on Australia’s prolific deposits of the metal.

For a list, click here.

Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.1% as of 7:04 a.m. Tokyo time

Currencies

The euro was little changed at $1.1384The Japanese yen was little changed at 157.43 per dollarThe offshore yuan was little changed at 6.7225 per dollarThe Australian dollar was little changed at $0.7018

Cryptocurrencies

Bitcoin fell 0.1% to $84,426.26Ether fell 0.3% to $2,676.61

Commodities

West Texas Intermediate crude rose 1% to $93.33 a barrelSpot gold fell 0.3% to $4,273.23 an ounce

This story was produced with the assistance of Bloomberg Automation.