Overview
- Negotiations to reopen the Strait of Hormuz stalled on Monday after Iran set conditions and declined direct talks with the United States, reviving a geopolitical risk premium for oil.
- Crude prices jumped about 5 percent with WTI near $82 and Brent around $87–88, reversing recent declines and lifting costs for energy-importing economies.
- Global equity action was mixed as U.S. indexes held near record highs while Pakistan and Indian markets showed sharp early weakness as investors reacted to the headline risk.
- Traders are positioned ahead of this week’s U.S. inflation reports because a rise in energy costs could offset last week’s weak payrolls and prompt the Federal Reserve to reconsider its policy path.
- Market-watchers also flagged elevated U.S. valuations and heavy AI capital spending as additional vulnerabilities that could deepen any re-rating if growth or returns disappoint.