Financial markets showed tension on Monday after US Donald Trump rejected Iran's response to a US proposal for peace talks, labeling it "completely unacceptable." According to Reuters, the dollar rose while stock indices worldwide largely stagnated. Brent crude oil futures jumped by up to 4.6 percent, last trading at $103 per barrel—a rise of about 45 percent since the start of US and Israeli attacks on Iran on February 28.
The blockade of the strategically important Strait of Hormuz further drives up oil prices. According to CNBC, markets remain in a phase of uncertainty as talks between the US and Iran have stalled. The MSCI All-World Index remained relatively stable on Monday, as did the European STOXX 600 and US stock futures.
Chris Beauchamp, chief market strategist at IG, told Reuters: "Markets are very good at assimilating things and learning to live with them that we thought were impossible. That is currently the case with crude oil. However, if the price were to rise another 50 percent, that would be a new test." He added: "Looking at the earnings data, they are really good. And if it weren't for the Iran situation, we would be running at full speed. But investors are trusting that some sort of agreement with Iran will come about, however unpleasant it may be."
The correlation between oil prices and the stock market has reversed in the past two weeks: both now move more frequently in the same direction, whereas they tended to move oppositely for most of the war. This shift is attributed to the ongoing strength of the US economy, bolstered by last week's solid jobs report. Meanwhile, as reported by n-tv.de, US Defense Secretary Pete Hegseth threatened Senator Mark Kelly with investigations for leaking classified information—another sign of the tense political climate in Washington.
