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Oil Prices Rise Ahead of Trump's Deadline to Reopen Hormuz
U.S. Crude Rose 3.9% to $116.83 a Barrel; Brent Crude Added 0.7% to $110.55
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NEW YORK 鈥斕齇il prices听are rising, and U.S. stocks are falling April 7 as the countdown ticks toward听the latest deadline听set by听President Donald Trump听to destroy Iranian power plants and bridges.
The S&P 500 fell 0.7% as Trump threatened that a 鈥渨hole civilization will die tonight, never to be brought back again鈥 if Iran does not meet his deadline at 8 p.m. Eastern time to open the听Strait of Hormuz. Iranian officials, meanwhile, urged听young people to form human chains听to protect power plants that Trump has threatened to bomb.
The Dow Jones Industrial Average was down 210 points, or 0.5%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.1% lower.
The moves were tentative, much like they've been since the start of the听war with Iran, as听uncertainty reigns听about whether the fighting could end soon. During just the first hour of April 7 trading, the Dow careened between a gain of 74 points and a loss of 425.
The moves were sharper in the oil market, where prices have spiked because the war has snarled the production and transportation of crude in the Persian Gulf. Much of that oil exits the gulf through the Strait of Hormuz to reach customers around the world, but Iran has blocked it to enemies.
The price for a barrel of benchmark U.S. crude climbed 3.9% to $116.83. Brent crude, the international standard, added 0.7% to $110.55 and is well above its roughly $70 level from before the war in late February.
The worry in markets has been that a long-term disruption will keep oil prices high for a long time and send a painful wave of inflation crashing through the global economy. Iran on April 6 rejected the latest ceasefire proposal听and instead said it wants a permanent end to the war.
So far in the war, Trump has made a series of threats to blow up Iranian power plants if it doesn鈥檛 open the Strait of Hormuz, but he has then delayed it several times. The possibility remains that Trump could back down again, among other scenarios, which is keeping uncertainty high.
A year ago, Trump ultimately backed off many of the stiff tariffs that he initially threatened to put on imports from other countries, though they ended up higher than from before his second term.
鈥淚nvestors are likely to remain on edge and markets unable to establish trends, probably until there is a clear outcome later this evening: a deal, the U.S./Israeli strikes intensify, or Iran鈥檚 retaliation becomes escalatory instead of proportional,鈥 according to Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.
On Wall Street, companies with big fuel bills fell to some of the sharpest losses as further gains in oil prices cranked up the pressure.
WTI crude up $2.60/bbl as Trump warns Iran with new escalations, national average price of gasoline rises to $4.14/gal, while diesel climbs to $5.62/gal, some ~20 cents from a new record high. Whether or not we see these numbers surge will depend on actions today. 鈥 Patrick De Haan (@GasBuddyGuy)
Norwegian Cruise Line Holding dropped 4.3%, and United Airlines sank 3.7%.
Companies whose customers may have the least room to absorb the recent jump in gasoline prices were also struggling. Dollar Tree slid 4.8%, and Dollar General fell 1.8%.
The average price for a gallon of regular gasoline across the United States has leaped to $4.14, according to AAA. It was below $3 a couple days before the United States and Israel launched attacks to begin the war in late February.
Companies enmeshed in the cryptocurrency industry were also losers as the price of bitcoin sank. Coinbase Global dropped 4.6%, and Strategy sank 4.1%.
Stocks of health insurers helped to limit the market鈥檚 losses after the Centers for Medicare & Medicaid Services said Medicare Advantage payments will likely see a net average increase of 2.48% in 2027. That was well ahead of what some investors expected, according to UBS analysts led by AJ Rice.
UnitedHealth Group jumped 8%, and Humana rose 5.5%.
Universal Music Group听also helped to limit losses for global stock indexes after Bill Ackman鈥檚 Pershing Square Capital Management offered to buy the record label behind Taylor Swift and Bad Bunny in a cash-and-stock deal valued at approximately $64 billion.
The proposed purchase, which Pershing Square argued would clear uncertainty that鈥檚 weighed on UMG鈥檚 stock, would bring the company to Nevada and move its stock listing from Amsterdam to the New York Stock Exchange. UMG鈥檚 stock in Amsterdam jumped 10.8% but remains well below what Pershing said its bid is worth. That could indicate investor doubt that the deal will happen.
Ceramex North America's JT Roberson and Matt Brady unpack what fleets get wrong about aftertreatment total cost of ownership.听Tune in above or by going to .听听
In stock markets abroad, indexes fell across much of Europe. Asian stock indexes were a touch stronger, with South Korea鈥檚 Kospi up 0.8% for one of the world鈥檚 bigger gains.
In the bond market, Treasury yields ticked a bit higher ahead of Trump鈥檚 looming deadline. The yield on the 10-year Treasury rose to 4.36% from 4.34% late Monday.
That's well above its 3.97% level from before the war, and the rise has pushed up听rates for mortgages听and other loans going to U.S. households and businesses, which slows the economy.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
