The U.S. is approaching to block the Strait of Hormuz. Global markets have been violently shaken. Oil prices have exceeded 100 and gold prices have plummeted.

April 13 — Global markets were roiled sharply after peace talks between the U.S. and Iran collapsed, with U.S. President Donald Trump announcing a blockade of the Strait of Hormuz. By early Asian trading hours, Brent crude soared 8.4% to retake the $100 mark, European natural gas jumped 18%; U.S. stock futures and Asian equities in Japan and South Korea traded sharply lower, spot gold plunged more than 2% against the trend, and Japan’s 5-year government bond yield hit an all-time high, sending all asset classes into wild swings.

The U.S.-Iran peace talks formally broke down over the weekend, and Trump quickly vowed to impose a naval blockade on the Strait of Hormuz, triggering broad-based market turmoil on Monday: energy supply shocks intensified further, oil and gas prices skyrocketed, and market inflation expectations reignited; risky assets came under broad pressure, U.S. stock futures and Japan-South Korea equities opened lower, while cryptocurrencies pulled back; a stronger dollar further weighed on gold prices, with market sentiment turning cautious amid intertwined factors.

Trump said in two consecutive social media posts on April 12 that the U.S.-Iran negotiations were “going well, with agreement on most issues,” but failed to reach consensus on the critical matter of the nuclear program. The president explicitly declared that, effective immediately, the U.S. military would “begin a blockade of all ships attempting to enter or leave the Strait of Hormuz.”

## Live Market Updates

**[Update 09:00 HKT]** Japan’s 5-year government bond yield rose 4 basis points to 1.900% at one point, hitting a record high, reflecting mounting market concerns over inflation and geopolitical risks.

**[Update 08:15 HKT]** Asian stock markets opened weaker. Japan’s Nikkei 225 fell 0.9% at the open, while South Korea’s Kospi slid 2.1%, as geopolitical risks clearly weighed on Asia-Pacific markets.

U.S. stock futures also fell sharply, with Dow futures and S&P 500 futures both down roughly 1.1%, and Nasdaq 100 futures 1.3% lower, with tech-related futures under particularly heavy pressure.

In energy markets, Brent crude surged 8.4% to $103.21 a barrel, while WTI crude jumped 8.9% to $105.12, both climbing back above $100 to hit recent highs. The European benchmark Dutch TTF natural gas futures spiked 18% at one point to €51.30 per megawatt-hour, exacerbating an already tight energy supply outlook.

Precious metals weakened sharply. Spot gold tumbled more than 2% to around $4,669 an ounce, erasing all of last week’s gains; the dollar strengthened against major currencies, with the Bloomberg Dollar Spot Index rising 0.4%. Cryptocurrencies also pulled back, with Bitcoin falling roughly 3% to break below the $71,000 level.

## U.S.-Iran Talks Collapse, Escalating Tensions

The U.S. and Iran held marathon 21-hour negotiations in Islamabad, Pakistan, but failed to reach any agreement. Iran, through its semi-official Tasnim News Agency, stated that the conditions put forward by the U.S. were “excessively harsh” and unacceptable. U.S. Vice President J.D. Vance said Washington’s core demand was a commitment from Iran to abandon nuclear weapons development, but the goal was not achieved upon his return to Washington.

Trump later posted on social media that “one thing was clear after the talks — Iran will not abandon its nuclear ambitions.” The breakdown also put the fragile ceasefire announced only last week to a severe test. Following last week’s ceasefire announcement, the S&P 500 rose 3.6% and the MSCI Emerging Markets Index surged 7.4%, as risk appetite temporarily recovered. On Sunday, two vessels attempted to transit the Strait of Hormuz, but turned back immediately after news of the talks’ collapse emerged, underscoring market anxiety over the strait’s security.

## Energy Markets Shocked, Inflation Pressures Build

The Strait of Hormuz is a critical global energy chokepoint, through which roughly one-fifth of the world’s crude oil and liquefied natural gas flowed before the conflict. Since late February, when the U.S. and Israel launched strikes against Iran, the waterway has effectively been paralyzed. Iran has continued to charge “transit fees” to some passing vessels, leaving oil flows through the strait at only a fraction of pre-conflict levels. According to JPMorgan, daily crude flows through the Strait of Hormuz have plummeted from the normal 15–20 million barrels to less than 2 million barrels, with a supply shortfall projected at 13 million barrels per day this month.

The U.S. blockade order means Iran’s nearly 2 million barrels per day of oil exports will be fully cut off, further tightening global energy supplies. Global refiners and traders are now scrambling to secure immediate spot crude cargoes, worsening supply tightness. European natural gas has risen more than 50% since the conflict began, even after retreating roughly one-third from its March 19 intraday peak — when Iran attacked Qatar’s largest LNG export facility, triggering a single-day surge in gas futures.

Data from the American Automobile Association (AAA) showed that as of Sunday, April 12, the U.S. national average gasoline price stood at $4.125 per gallon. Iranian Parliament Speaker MB Ghalibaf wrote sarcastically on X: “Enjoy current oil prices while you can. Once the so-called ‘blockade’ takes effect, you’ll soon be nostalgic for $4–5 per gallon.”

U.S. March inflation data already showed clear pressure. The Labor Department reported that U.S. CPI rose 0.9% month-on-month in March, the largest increase since July 2022. Gasoline prices surged 21.2% — the biggest monthly gain since 1967 — contributing nearly three-quarters of the monthly CPI increase.

Anna Wu, cross-asset strategist at VanEck, said markets are increasingly convinced the oil price shock is no longer a temporary disturbance but a medium-to-long-term scenario — with oil likely to “stay higher for longer.” The latest rebound looks more like a technical bounce, she noted, after oil plunged 17% on the day the ceasefire was announced. “As markets adjust to the new price range, the dynamic resembles how investors handled tariff risks before: an initial concentrated ‘repricing,’ then, once the worst-case scenario is priced in, the risk factor gradually fades into background noise.”

## Market Sentiment Under Pressure, Analysts Divided

Market strategists see the U.S. blockade announcement as a clear near-term drag on risky assets. Stuart Kaiser, head of U.S. equity trading strategy at Citi, wrote in a Sunday note: “Iran talks failed, and Trump plans to blockade the Strait of Hormuz. This non-violent escalation leaves room for further talks but could drive oil higher in the interim.”

Evercore ISI said in a client note Sunday that the blockade announcement “could weigh on markets in the near term, as potential confrontations between the U.S. Navy and Iran-linked vessels risk sparking conflict and ending the fragile ceasefire.” Still, the firm believes Trump wants to avoid a full-scale return to conflict, and the escalation is “ultimately aimed at pushing for further dialogue.”

Garfield Reynolds, chief of Bloomberg’s MLIV team, noted that front-month WTI and Brent contracts surging well above $100 will break the earlier narrative that assets could revert to pre-conflict levels — a view that had taken hold as U.S.-Iran talks seemed to pave the way to resolving the unprecedented supply shock facing the global economy. Elias Haddad, global markets strategist at Brown Brothers Harriman, said Trump’s naval blockade announcement “is set to reignite risk aversion in markets this week.”

## U.S. Earnings Season Kicks Off, Corporate Outlook in Focus

Markets also face a key milestone: the first-quarter U.S. earnings season is set to begin, with Goldman Sachs reporting results on Monday, April 13. Analysts forecast S&P 500 component earnings will rise roughly 12% year-on-year in Q1 — the slowest pace since Q2 2025.

Investors are looking for more guidance from corporate management to assess the potential hit to consumer demand from surging oil and rising inflation. Data released last Friday showed a sharp drop in U.S. consumer confidence, with growing worries that rising energy costs will erode corporate profits and household spending.

For last week, the Dow, S&P 500 and Nasdaq Composite all posted weekly gains. As of Friday, the S&P 500 had risen 4.4% in April but remained slightly lower for 2026 as a whole, following a sharp March decline.

## Risk Warning and Disclaimer

Markets are volatile and investments involve risk. This article does not constitute personalized investment advice, nor does it take into account the specific investment objectives, financial situations or needs of individual users. Readers should consider whether any opinions, views or conclusions in this article suit their particular circumstances. Any investment decisions made based on this article are at your own risk.