U.S.-Iran Tensions Spike as Strait of Hormuz Closure Drives Oil Surge

U.S. equity futures are trending lower on Monday as geopolitical instability in the Middle East threatens to erase recent market gains. The downturn follows reports that Iran has closed the Strait of Hormuz and targeted tankers in the waterway, citing a U.S. blockade of Iranian ports as the catalyst for these actions. The escalation comes as a ceasefire agreement between Washington and Tehran nears its expiration this week. President Donald Trump characterized Iran's actions as a "total violation" of the agreement and threatened strikes on Iranian infrastructure, including power plants and bridges, should a deal not be reached. While the administration mentioned sending representatives to Islamabad for talks, Tehran has denied that a second round of negotiations is planned. Market volatility is most evident in the energy sector, where U.S. crude oil futures surged more than 5%, briefly exceeding $90 per barrel before settling at $88.52. The price jump was further catalyzed by the U.S. seizure of an Iranian-flagged cargo ship in the Gulf of Oman. This geopolitical shock follows a record-breaking week for U.S. indices, during which the Nasdaq rose 6.8% and the S&P 500 climbed 4.9%. While Asia-Pacific markets remained largely positive on Monday, European indices have already declined, with the German DAX dropping 1.3% and the French CAC 40 falling 1.1%. Gold futures have seen a slight pullback to $4,834.20 an ounce following a previous rally.