Geopolitics is taking centre stage at the start of the trading week, with a planned U.S. blockade of the Strait of Hormuz driving fresh volatility across markets. The move has pushed oil prices higher again, while upcoming inflation data and a busy earnings calendar could provide further direction for investors.
The U.S. military has confirmed it will begin restricting maritime traffic linked to Iran through the Strait of Hormuz from 10 a.m. Eastern on Monday, following an order from President Donald Trump after weekend talks with Iran failed to yield progress.
According to the Pentagon, vessels “entering or departing Iranian ports and coastal areas” will be targeted, while other ships transiting the strait will still be permitted to pass.
The decision follows 21 hours of negotiations in Pakistan that ended without an agreement to extend a fragile two-week ceasefire. Vice President JD Vance, who led the U.S. delegation, said Iran rejected demands to halt its nuclear ambitions. Pakistan, acting as a mediator, urged both sides to “uphold their commitment to ceasefire.”
Elsewhere, Israel and Lebanon are set to hold talks in Washington this week, although continued strikes on Hezbollah-linked targets have raised doubts about the durability of any broader regional truce.
Crude prices surged again on Monday, breaking back above the $100 per barrel level.
Brent crude rose 6.7% to $101.65, while U.S. West Texas Intermediate gained 7.1% to $103.42.
Despite the rally, analysts at Pepperstone said the market response had been “relatively contained,” with investors interpreting the blockade largely as a negotiating tactic.
“I’d not be at all surprised to see risk assets remain underpinned to a degree, with continued hope that a deal can be agreed likely to continue to encourage dip buying, even as crude benchmarks are likely to grind steadily higher as physical supply tightens further,” said Michael Brown, Senior Research Strategist at Pepperstone.
Oil had dipped below $100 last week following the ceasefire announcement, which itself came after Trump warned Iran’s “civilization” could be destroyed if the Strait of Hormuz was not reopened. Even so, prices have remained well above pre-conflict levels.
Rising energy costs have heightened concerns about inflation globally and how central banks may respond.
This week, attention will turn to U.S. producer price index (PPI) data for final demand, which will provide a clearer picture of price pressures in March—the first full month reflecting the impact of the Iran conflict.
Recent consumer price data already showed a sharp increase, driven largely by higher fuel costs. Energy prices jumped 12.5% year-on-year, compared with just 0.5% in February.
However, core inflation—which excludes food and energy—came in softer than expected, at 2.6% annually and 0.2% month-on-month.
Given this, analysts believe the Federal Reserve may not place excessive weight on the headline figures alone. The upcoming PPI release could offer further clues on how policymakers approach interest rates in the months ahead.
“A stronger-than-expected [PPI] reading would reinforce the case for a ‘higher for longer’ rate outlook, likely supporting the dollar and leaving EUR/USD’s recent rebound vulnerable to renewed downside,” said Laurence Booth, Global Head of Markets at CMC Markets.
The U.S. earnings season gathers pace this week, led by results from major Wall Street lenders.
Goldman Sachs (NYSE:GS) is set to report first, with its shares up around 3% so far this year. Trading revenues have been supported by portfolio repositioning linked to developments in artificial intelligence, while its investment banking division has also delivered growth.
However, the Iran conflict may weigh on outlooks. While volatility can boost trading income, elevated commodity prices could discourage dealmaking activity such as mergers and acquisitions, potentially affecting advisory revenues.
Other banks reporting include JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS).
Beyond banking, earnings are also expected from Netflix and PepsiCo.
In Europe, attention will turn to the luxury sector, where several major groups are due to report.
LVMH (EU:MC), owner of brands such as Louis Vuitton and Dior, is scheduled to release first-quarter sales, with geopolitical tensions likely to influence its outlook. Peers Kering SA (EU:KER) and Hermès (EU:RMS) are also set to report.
According to Reuters, luxury sales in markets such as Dubai and Abu Dhabi have declined due to the conflict, weighing on the $400 billion sector.
Elsewhere, ASML (NASDAQ:ASML) will report on Wednesday, with investors watching closely for updates on its ability to meet strong demand from artificial intelligence chipmakers.
Goldman Sachs Group stock price
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This article was written by the editorial team at InvestorsHub/ADVFN and is provided for informational purposes only. In some cases, editorial staff may use artificial intelligence–based tools to assist in the research, drafting, or editing of content, under human review and oversight. This article does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. The views expressed are based on publicly available information believed to be reliable at the time of publication, but accuracy or completeness is not guaranteed. Readers should conduct their own independent research and consult a qualified financial professional before making any investment decisions.
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