U.S. stock futures weakened and oil prices climbed as traders awaited a peace deal deadline set by President Trump for Iran. The Euro Stoxx 50 fell 0.4%, with major European indices mostly lower. Germany's DAX dropped 0.3%, while the UK's FTSE 100 declined 0.1%. European markets resumed trading after the Easter long weekend.
U.S. equity futures pointed downward after Monday's modest gains for blue-chip indices. Dow Jones Industrial Average futures fell 0.4%, S&P 500 futures declined 0.5%, and Nasdaq Composite futures dropped 0.6% premarket. Traders appeared ready to pause a four-day rally—the best winning streak since last May.
Oil prices rose as markets awaited clarity on whether Trump would follow through on threats to destroy Iranian infrastructure or walk back his statements. Brent crude increased 1.0%, bringing its total gain since the conflict began to over 50%. WTI crude jumped 2.8%.
Rising tensions in oil markets were reflected in high spot crude premiums. Before the Easter break, Brent spot prices surged above $140 per barrel, hitting the highest level since 2008.
Priyanka Sachdeva of Phillip Nova noted, "Oil has held gains because battlefield risks are no longer theoretical. Attacks on energy and shipping assets continue, and traders worry that even if the war ends, infrastructure damage could disrupt some crude supplies for months, not just days."
European natural gas prices also rose, with the benchmark Dutch TTF near-month contract up 1.2% to €50.67 per megawatt-hour. According to Kpler, two Qatari LNG cargoes originally headed toward the Strait of Hormuz changed course on Monday.
Markets have been on edge since the U.S. and Israel clashed with Iran in late February. Tehran's effective closure of the Strait of Hormuz has fueled inflation concerns and dampened investor confidence.
Despite hopes for a diplomatic breakthrough, talks have so far made little progress. Trump's deadline, set for 8 p.m. ET, added pressure by demanding an agreement by that time.
Market attention remains fixed on the Strait of Hormuz—a critical artery for Middle Eastern oil shipments. The U.S. president insists any deal must guarantee unimpeded shipping through the waterway. While he described negotiations as "moving well," he also threatened to destroy Iranian bridges and power plants if no agreement is reached.
In a social media post, Trump warned, "The whole of civilization tonight will disappear, never to be restored. I don’t want that to happen, but it likely will. However, since we’ve achieved total regime change, with a smarter, more mature new leadership in charge, perhaps something transformative will occur. Who knows? Tonight we will know—a crucial moment in the world’s long and complex history."
The U.S. conducted strikes early Tuesday local time on military targets on Kharg Island. One official stated that over 50 targets were hit. The strikes, carried out around early Tuesday ET, did not include oil infrastructure. Trump has set Tuesday evening ET as the deadline for Iran to reopen the Strait of Hormuz, warning of devastating strikes on energy infrastructure if it fails to comply.
Several Iranian railway bridges and facilities have been attacked, including those in Kashan, Qazvin, Zanjan, and GHALE-NO.
Jennifer Griffin, chief national security correspondent for Fox News, reported that the Kharg Island strikes were conducted solely by the U.S., not Israel. A senior U.S. official described the action as "a signal to the Iranians." A U.S. military source added that if Iranian railways were attacked, it was not by American forces.
Kyle Rodda, senior market analyst at Capital.com, commented, "We are back under Trump’s countdown clock, and no one can confidently predict what will happen. Bolder traders may bet on one outcome, while others hedge risks or exit entirely. But there’s little market participants can do except wait and see."
Iran has stated it seeks a permanent end to the war, not a temporary ceasefire, and has resisted pressure to reopen the strait, which handles about one-fifth of global oil and gas shipments.
Vasu Menon, managing director of investment strategy at OCBC Bank Singapore, said, "If threats to strike Iran’s power infrastructure are carried out, it would mark a significant escalation and raise the risk of Iranian retaliation further disrupting Gulf energy facilities."
Emma Moriarty, portfolio manager at CG Asset Management Ltd., noted, "There’s no clear catalyst behind recent sentiment shifts. With Trump’s deadline approaching and no signs of a deal, markets may assume a 'TACO' scenario—that the deadline will be extended again."
Trump’s latest deadline marks another critical moment in a conflict that has killed thousands and triggered the largest disruption in global oil markets on record. Iran launched seven ballistic missiles and additional drones at Saudi Arabia from Monday night into Tuesday, while the Israeli military reported two missile barrages from Iran since midnight.
Adam Linton, Bloomberg macro strategist, observed, "Markets have grown accustomed to the president extending these Iran deadlines to allow more time for talks, and the same may happen today. Although markets might take some comfort if Trump pushes for the strait’s reopening, the tail risk of a substantive U.S.-Iran escalation will likely keep traders cautious."
In currency markets, the euro held steady at $1.1535. The U.S. dollar index, which measures the greenback against six major peers, stood at 100.03, near recent highs. The dollar has remained a preferred safe-haven asset during the turmoil.
The yen hovered near the key 160 level against the dollar, with traders watching for possible intervention by Tokyo after recent hawkish remarks.
U.S. Treasury yields rose as hopes for a U.S.-Iran deal faded. The two-year yield increased 1.6 basis points to 3.865%, the 10-year yield climbed 1.9 basis points to 4.354%, and the 30-year yield advanced 2.2 basis points to 4.912%.
Jesper Fjaerstedt of Danske Bank noted that the U.S. macro backdrop remains complex but resilient, with rising inflation pressures alongside solid activity indicators such as retail sales, consumer confidence, and a strong March jobs report. However, he pointed out that ISM services data already shows signs of stagflation.
Eurozone government bond yields also rose. Germany’s 10-year yield increased 3.8 basis points to 3.026%, while Italy’s 10-year yield climbed 4.5 basis points to 3.898%, according to Tradeweb. Hauke Siemssen of Commerzbank stated, "Markets are delicately balancing escalation fears against ceasefire hopes as the new deadline approaches."
Beyond Middle East tensions, traders are also focused on key inflation data due later this week. Friday’s strong U.S. March jobs report showed a drop in the unemployment rate.
Recent economic data has not reinforced expectations that the Federal Reserve will resume rate cuts soon. Markets anticipate that Friday’s March CPI report will show the largest monthly rise in U.S. headline inflation since June 2022, largely driven by a spike in gasoline prices linked to the Iran conflict.
In premarket movers, space-related stocks continued to rise amid reports that SpaceX has finalized IPO details. Virgin Galactic, which surged 24.8% yesterday, gained nearly 6% premarket. Momentus rose over 2%, with Rocket Lab, AST SpaceMobile, and KULR Technology also advancing.
Healthcare stocks climbed premarket after the U.S. announced a 2.48% Medicare rate increase for next year. Alignment Healthcare jumped 12.5%, Humana gained nearly 11%, UnitedHealth rose 6.6%, CVS Health increased 6.2%, Elevance Health advanced 5.5%, and Cigna added 4.7%.
Broadcom rose over 2% premarket after announcing partnerships with Google and Anthropic.
Neurocrine Biosciences gained 5% premarket following its $2.9 billion acquisition of Soleno Therapeutics to expand into metabolic diseases.
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