Oil climbs as US‑Iran deadlock keeps Hormuz shut, markets await retail earnings

Crude oil nudged higher on Monday after the United States and Iran failed to reach an agreement that would reopen the Strait of Hormuz, leaving the key waterway closed for almost six months. Analysts say the impasse is likely to keep oil prices elevated, feeding through to broader market sentiment.

"Traders continue to keep an eye on the US‑Iran standoff," said David Morrison, analyst at Trade Nation.

In the United States, equity markets showed mixed movement. The Dow Jones Industrial Average fell 0.4% to 53,528 points, the S&P 500 slipped 0.1% to 7,775, while the Nasdaq Composite inched up 0.1% to 26,758. Across the Atlantic, the FTSE 100, CAC 40 and DAX all ended the session in negative territory.

Despite the oil‑related pressure, investors are still banking on a possible pause in Federal Reserve rate hikes, which they hope will provide some relief amid the geopolitical uncertainty. Patrick J. O'Hare of Briefing.com observed that “the market has been able to maintain some hope that diplomacy will prevail and that oil won’t trigger a global recession.”

Attention is now turning to the earnings season, with retail giants Walmart, Home Depot and Target slated to report later this week. Ipek Ozkardeskaya, analyst at Swissquote, noted that weaker retail results could ease inflation concerns, lower expectations of further Fed tightening and support technology‑heavy indices.

In Asian trading, technology stocks lifted regional markets. Hong Kong’s Hang Seng Index rose 1.3% on gains from Alibaba, Tencent and JD.com. Both Shanghai and Taipei posted advances. Tokyo’s Nikkei climbed 0.7% after memory‑chip maker Kioxia surged more than 15%, while SoftBank, Advantest and Tokyo Electron each added between 1.6% and 2.6%.

The US dollar continued its decline against major currencies, trading at $1.1587 per euro and $1.3559 per pound, while the yen weakened to 159.34 per dollar.

Overall, markets are weighing the upside from a potentially softer Fed stance against the downside of ongoing Middle East tensions. Investors will be watching for any diplomatic breakthrough on the Hormuz issue and the forthcoming retail earnings to gauge the next direction.