Stocks Lower, Oil Higher After Weekend Peace Talks Don't Lead to Deal

Stock futures fell Monday and oil prices rose after U.S. and Iranian peace talks ended over the weekend without a deal, while President Donald Trump threatened to blockade the Strait of Hormuz. Investors also looked ahead to the start of first-quarter big bank earnings, with Goldman Sachs reporting first.

Stocks lower, oil higher after weekend talks

Futures pointed to a lower open as investors reacted to the lack of an agreement between Iranian and U.S. officials. Dow Jones Industrial Average futures were down 0.4%, while S&P 500 and Nasdaq 100 futures were each down around 0.5%.

Major indexes finished Friday mostly lower but posted weekly gains for a second straight week, supported by optimism around a potential ceasefire with Iran. Gold futures were down 1% to about $4,740 an ounce, and the 10-year Treasury yield was little changed from last week’s close of 4.34%.

Bitcoin traded just under $71,000, after moving as high as $73,800 and as low as $70,500 over the weekend.

Crude oil jumps above $100 amid Hormuz blockade threat

Crude oil futures surged 8% to $104 per barrel. Trump said Sunday, after the talks ended without a deal, that the U.S. military would soon blockade the Strait of Hormuz and halt all traffic through the waterway.

Later, the U.S. military said it would blockade ports and coastal areas in Iran rather than the entire strait. Iranian officials responded with threats to other ports in the region, according to The Associated Press.

Trump threatens new tariffs on China over Iran arms report

Trump also threatened new tariffs on China in an interview with Fox News after being asked about a CNN report suggesting U.S. intelligence found China is supplying weapons to Iran. Trump said he would impose a new 50% tariff on Chinese imports if China’s involvement is confirmed.

Trump’s tariff threats had been quieter in recent weeks as attention shifted to the war, though he has threatened tariffs on imports from countries that help Iran, according to CNBC. In February, the Supreme Court struck down most of the tariffs Trump imposed last year, with Trump looking to impose new tariffs through other laws.

Big bank earnings begin with Goldman Sachs

Goldman Sachs is the first major bank to report first-quarter earnings, with results due out at 7:30 a.m. ET Monday. Analysts project first-quarter revenue up 13% year-over-year to $17.06 billion and earnings of $16.52 per share.

Other banks are scheduled to report later this week, and executives are expected to address an uncertain economy marked by inflation driven by the Iran war and worsening consumer sentiment. Investors will look for signals on the health of the American consumer and for management perspectives, including views from JPMorgan Chase CEO Jamie Dimon.

What to watch this week: earnings and economic data

Other banks reporting include JPMorgan, Citigroup, and Wells Fargo on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday.

Investors will also get updates from the tech sector, including Taiwan Semiconductor Manufacturing and Netflix, and from the grocery industry, including Albertsons and PepsiCo.

Several economic reports are also due this week, including existing home sales on Monday, the Producer Price Index on Tuesday, and the Federal Reserve’s Beige Book on Wednesday.