U.S. Futures Slide as President Trump Orders Hormuz Blockade

U.S. stock futures are lower in premarket trading after President Trump announced a blockade of the Strait of Hormuz, as peace talks between the U.S. and Iran over the weekend ended without a deal. The breakdown of negotiations over the weekend in Pakistan reignited worries that the U.S.-Iran war will last longer than feared, leading to higher oil prices that will continue to strain economies worldwide.

WTI Crude is up 7% ahead of the Wall Street open near $104 a barrel. U.S. Central Command said it will begin blocking all maritime traffic in and out of Iran’s ports at 10 a.m. ET Monday. The U.S. said it will not block vessels using the strait to get to non-Iranian ports.

The weakness in stocks comes after the major indices posted their best week since November. Investor focus remains on headline news out of the Middle East but will turn to earnings season. Financials will unofficially kick off earnings this week with reports due from Goldman Sachs (GS), Citigroup (C) and JPMorgan Chase (JPM) along with Netflix (NFLX) on Thursday.

Snapshot (as of 7 AM ET)

• Oil (/CL) – Crude oil prices are surging 7% near $104 a barrel as the U.S. Navy prepares to impose a blockade on Iran’s ports after peace talks failed over the weekend. U.S. Central Command said Sunday the military will blockade all maritime traffic entering and exiting Iranian ports on Monday at 10 a.m. ET. It added that the U.S. will not impede vessels transiting to and from non-Iranian ports. “The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman,” CENTCOM said in a statement.
• Gold (/GC) – Gold prices are down nearly 1% at $4745 near one-week lows, pressured by a stronger dollar, while a surge in oil prices following failed U.S.-Iran peace talks fueled inflation worries and dampened expectations for Federal Reserve interest rate cuts this year.
• Bitcoin (/BTC) – The Crypto Future is down 3% near 71,000 in premarket trading.
• VIX – The CBOE Volatility Index was down 1.3% on Friday and settled at 19.23 as stocks were muted. It was the lowest closing price for the VIX since February 26th . The VIX is up 10% this morning as stocks are under pressure.
• U.S. Dollar (/DX) – The dollar is slightly higher in the session, trading at 99.00

Biggest Premarket Movers (as of 7 AM ET)

1. Occidental Petroleum (OXY): +2.66%
2. On Semiconductor (ON): +2.55%
3. APA Corp (APA): +3.00%
4. Diamondback Energy (FANG): +2.28%
5. CF Industries (CF): +2.23%

1. Fastenal Corp (FAST): -3.90%
2. Carnival Corp (CCL): -3.65%
3. Goldman Sachs (GS): -3.50%
4. Best Buy (BBY): -2.69%
5. United Airlines (UAL): -2.59%

Economic Data

• 10:00 AM ET: Existing Home Sales
• 11:30 AM ET: 3 and 6-Month Bill Auctions

Notable Earnings

• Premarket: GS, FAST
• Postmarket: N/A
• Premarket Tomorrow: ACI, BLK, KMX, C, JNJ, JPM, RENT, WFC
• Postmarket Tomorrow: N/A

Upgrades/Downgrades

• Macquarie upgrades CoreWeave (CRWV) to Outperform from Neutral
• Jefferies upgrades Starbucks (SBUX) to Hold from Underperform
• KeyBanc upgrades T-Mobile (TMUS) to Overweight from Sector Weight
• Raymond James downgrades HPE (HPE) to Outperform from Strong Buy
• Goldman Sachs double downgrades Best Buy (BBY) to Sell from Buy

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