US stocks fall as oil climbs above $100 per barrel after Trump announces Strait of Hormuz blockade amid Iran ceasefire

US stocks fell Monday morning as oil prices surged past $100 a barrel after President Trump announced a new blockade of the Strait of Hormuz during a precarious ceasefire with Iran.

As of 10:45 a.m. ET, the Dow Jones Industrial Average fell 168 points, or 0.4%. The S&P 500 rose 0.1% and the Nasdaq gained 0.3%.

Oil jumps after blockade announcement

Brent crude oil futures climbed 5.6% to $100.54 a barrel, while West Texas Intermediate rose 5.2% to $94.19. National average gasoline prices reached $4.13 a gallon, according to AAA.

After US-Iran talks failed to produce a deal over the weekend, Trump said Sunday that the US would launch its own blockade of the strait, a vital maritime route in the Persian Gulf that carries about 20% of the world’s oil.

Trump said on Truth Social that “the United States Navy” would begin the process of “BLOCKADING any and all Ships” trying to enter or leave the Strait of Hormuz. He also warned that Iranian forces that fire at vessels would face retaliation.

US Central Command to begin port-related blocking

US Central Command said it will start blocking traffic through Iran’s ports at 10 a.m. ET Monday. It said it will not block vessels using the waterway to travel to non-Iranian ports.

Investors had been looking for signs of a deal to end the Middle East conflict, which has already caused the worst-ever energy supply disruption in history and pushed US inflation to its highest level in two years.

Ceasefire talks and renewed uncertainty

Vice President JD Vance left Islamabad, Pakistan, without a deal after leading the US delegation in 21 hours of talks with Iranian counterparts.

Vance said Iran refused to commit that it would not seek a nuclear weapon, and that Iran demanded control of the Strait of Hormuz, war reparations, and the release of frozen assets.

Trump is weighing whether to resume limited strikes on Iran, according to the Wall Street Journal, raising concerns for investors who had hoped a double-sided two-week ceasefire would hold.

Oil-price outlook and gasoline costs

In an interview with Fox News host Maria Bartiromo on Sunday, Trump indicated he was not prepared to commit to lower oil prices soon, suggesting they could rise further by the midterm elections.

He said: “Well, it’s eventually going to be lower.” He added that it might not happen immediately and that prices could instead be “the same” or “a little bit higher,” but should be “around the same.”

Market focus shifts to earnings

Goldman Sachs shares fell 3.7% Monday despite a strong earnings report, as traders focused on disappointing trading results in its fixed income unit.

Major banks, including Citigroup, Wells Fargo, JPMorgan Chase, Morgan Stanley, and Bank of America, are scheduled to report earnings this week.

Clark Bellin, president and chief investment officer at Bellwether Wealth, said in a note Monday that investors are reassessing the “fair value of stocks” as it becomes clear there is “no end in sight” to the Middle East conflict, and that market repricing typically brings volatility.

Bellin added that more “saber-rattling” over the waterway could extend the stock market correction, and said the key question is whether the upcoming earnings season can act as a catalyst strong enough to loosen the close link between stocks and oil.

Last week, all three major US stock indexes posted their best gains since November after Trump announced a two-week pause on strikes with Iran and traders became more optimistic about a more permanent end to the war.