Oil prices jumped sharply on Thursday after Iran said it would not reopen the Strait of Hormuz while a US naval blockade remains in place, despite an extension of the ceasefire. The statement renewed fears over global energy supplies and pushed crude benchmarks higher in early trading.
At about 8:25 a.m., US benchmark West Texas Intermediate rose 4.06% to $96.73 a barrel, while Brent crude climbed 3.62% to $105.63 a barrel before both contracts eased slightly. Oil prices have remained under pressure since Israel and the United States attacked Iran on February 28, with markets continuing to react to the risk of a wider regional war.
The latest move came as uncertainty persisted over whether fighting could resume. US President Donald Trump said on Tuesday that he would extend the truce to allow Pakistani-brokered peace talks to continue. Iran welcomed Pakistan’s efforts but did not comment further on Trump’s ceasefire extension.
Financial markets responded with a mixed but broadly resilient tone. Wall Street advanced after the truce extension, with all three major US indexes posting gains and technology stocks leading the Nasdaq higher. The S&P 500 and the Nasdaq also closed at record highs, suggesting investors still expect the Strait of Hormuz to reopen before serious long-term damage hits the global economy.
Bill Merz, head of capital markets research at US Bank Wealth Management in Minneapolis, said investors continue to focus on broader economic strength despite the energy shock. He said corporate fundamentals and consumer spending remain solid, and that markets appear to believe the Strait of Hormuz will reopen before the global economy suffers major harm.
Tensions remained high even after the ceasefire extension. Iran’s Revolutionary Guards seized two vessels for maritime violations just hours after Trump agreed to extend the truce until negotiations conclude. The Strait of Hormuz normally carries about one-fifth of the world’s oil and liquefied natural gas supplies, making any disruption there a major global risk.
US stocks, which initially fell after the war began, have since recovered fully. The S&P 500 and Nasdaq have returned to all-time closing highs in recent sessions. Even so, geopolitical uncertainty continues to hang over financial markets, and a prolonged period of high oil prices still threatens growth and inflation.
Energy costs have already become a growing concern for major companies. A Reuters review of earnings call transcripts found that about two-thirds of S&P 500 companies reporting quarterly results since early April have discussed the impact of energy prices. Merz said such global events often dominate earnings commentary, though he added that they have not yet significantly changed broader consumer or corporate behaviour.
The first-quarter earnings season is continuing against high expectations. Analysts currently forecast year-on-year S&P 500 earnings growth of 14.4% for the January-March period, according to LSEG data.
By the close, the Dow Jones Industrial Average had risen 341.27 points, or 0.69%, to 49,490.52. The S&P 500 gained 73.90 points, or 1.05%, to 7,137.91, while the Nasdaq Composite advanced 397.60 points, or 1.64%, to 24,657.57.
European markets moved in the opposite direction. Shares closed lower for a third straight session as Middle East tensions and corporate earnings weighed on sentiment. The STOXX 600 fell 0.35%, while the FTSEurofirst 300 also dropped 0.35%.
Read: Oil Prices Jump on Iran Tensions and Hormuz Closure
Elsewhere, emerging market stocks fell 0.58%, and MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.6%. Japan’s Nikkei, however, rose 0.40%.
Currency markets reflected lingering caution. The dollar strengthened as geopolitical risks remained in focus, rising 0.26% to 98.63 on the dollar index. The euro fell 0.32% to $1.1704, while the dollar gained 0.12% against the Japanese yen to 159.56.
Cryptocurrencies also moved higher. Bitcoin rose 4.13% to $78,866.74, and Ethereum gained 3.48% to $2,398.37. US Treasury yields edged up in choppy trading. The benchmark 10-year Treasury yield rose to 4.304%, the 30-year bond yield climbed to 4.9091%, and the 2-year note yield increased to 3.8%.
