- Oil prices jumped over 7% on Monday, recovering from the recent decline.
- Reports on Monday revealed that Iran had decided to end all talks with the US.
- NVIDIA launched a new chip for PCs.
Equities hit record highs on Monday despite an escalation in tensions between the US and Iran. Iranian officials said they would stop all negotiations with the US due to ceasefire violations in Lebanon. However, reports of a new computer chip by Nvidia sent the tech sector high, boosting equities.
S&P 500 (Source: Bloomberg)
Oil prices jumped over 7% on Monday, recovering from the recent decline. Last week, market participants had been optimistic about a likely peace deal between the US and Iran. As a result, the S&P 500 soared. By Friday, reports suggested that the two nations were planning to extend their ceasefire by 60 days. Furthermore, Iran would lift restrictions on traffic through the Strait of Hormuz. As a result, oil prices fell, and the stock market extended its rally.
The ceasefire extension was meant to give them more time for talks about other issues like Iran’s nuclear program. However, Trump did not make a final decision on the deal. Moreover, tensions escalated with fresh strikes.
At the same time, reports on Monday revealed that Iran had decided to end all talks with the US owing to violations of their ceasefire deal. Iran pointed to Israel’s renewed attacks in Lebanon. Top officials also threatened to completely block the Strait of Hormuz.
“No dialogue will take place until Israel fully withdraws from occupied areas in Lebanon and stops all attacks in both Lebanon and Gaza,” per Tasnim.
“Also, the resistance front and Iran have resolved to completely block the Strait of Hormuz and activate other fronts, including the Bab al-Mandeb Strait, to punish the Zionists and their supporters,” the report said.
Meanwhile, Trump said he really did not care if Iran stopped negotiations. According to him, the talks have gone on for far too long. If Iran acts on its threats, the oil market will remain tight, and prices will keep climbing. Consequently, inflation worries will remain, weighing on equities.
However, market participants focused on reports that Nvidia had launched a new computer chip on Monday. The news propelled the tech sector and sent the S&P 500 to new record highs. Nevertheless, war uncertainty will soon put pressure on equities.
Traders are also eagerly awaiting the US nonfarm payrolls report to see the state of the economy.
