Dow, S&P 500, Nasdaq futures fall as the US and Iran fail to agree to peace, US blockades Hormuz

US stock futures fell sharply on Sunday evening after President Donald Trump said the US would move to block all maritime traffic in the Strait of Hormuz after weekend talks between Washington and Tehran collapsed.

Futures tied to the Dow Jones Industrial Average (YM=F) fell about 1.2%, indicating a decline of more than 580 points at the open. S&P 500 (ES=F) and Nasdaq 100 (NQ=F) contracts also fell 1.3% and 1.4%, respectively.

Last week, optimism about a temporary ceasefire led to a strong rally. The S&P 500 (^GSPC) was up about 3.6%, while the Nasdaq (^IXIC) was up about 4.7% and the Dow (^DJI) was up 3% for its best weekly performance since November.

Tump published a post boosting hopes for an end to hostilities following peace talks over the weekend. Real Social“Effective immediately, the United States Navy, the Best Navy in the World, will begin the process of BLOCKING all Ships attempting to enter or exit the Strait of Hormuz.”

The announcement came after failed negotiations in Islamabad, where US officials, including Vice President J.D. Vance, left without a deal. The disputes have reportedly spread beyond Iran to broader demands such as control of the strait. financial compensationand stopping Israeli attacks in Lebanon.

Markets reacted quickly to the lack of resolution. US crude oil West Texas Intermediate (CL=F) rose more than 8% to over $104 per barrel, while Brent (BZ=F) crude rose 7.5%, raising concerns about renewed inflationary pressure and a potential drag on global growth.

Attention now turns to the start of first quarter earnings season. Major US banks will announce results; Goldman Sachs (GS) will start on Monday, followed by Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), JPMorgan Chase (JPM) and Morgan Stanley (MS) throughout the week.