Dow futures drop 500 points after Trump announces Strait of Hormuz blockade as talks fail: Live updates – CNBC

The S&P 500 rose on Monday as investors hoped that a deal would eventually be struck between the U.S. and Iran.

The broad market index jumped 1.02% to end at 6,886.24, the highest close since before the war began. The Nasdaq Composite gained 1.23% to 23,183.74. The Dow Jones Industrial Average added 301.68 points, or 0.63%, to settle at 48,218.25. The 30-stock index came back from a decline of more than 400 points, or about 0.9%, earlier in the session. The S&P 500 was down 0.4% at its session low, while the Nasdaq had fallen 0.5%.

Technology names offered a boost to the broader market, with software stocks such as Oracle and Palantir Technologies rising nearly 13% and more than 3%, respectively. Those advances helped the S&P 500 erase its decline since the Iran war.

Stocks took a leg higher after President Donald Trump said, “We’ve been called by the other side.” He added, “They’d like to make a deal very badly.”

This comes after Trump announced a blockade of the Strait of Hormuz, with peace talks between the U.S. and Iran over the weekend ending without a deal. The blockade of all maritime traffic in and out of Iran’s ports went into effect Monday. U.S. Central Command said the U.S. will not block vessels using the strait to get to non-Iranian ports.

The breakdown of negotiations in Islamabad reignited worries that the Iran war will last longer than feared, leading to higher oil prices that will continue to strain economies worldwide. West Texas Intermediate crude oil advanced 2.6% to settle at $99.08 per barrel. International Brent popped 4.37% to settle at $99.36 a barrel.

Vice President JD Vance left Islamabad without a deal with his Iranian counterparts, citing their unwillingness to stop the pursuit of nuclear weapons. But both sides appear farther apart than just that issue, with Iran demanding control of the Strait of Hormuz, war reparations and the release of frozen assets.

Mediators from Pakistan, Egypt and Turkey will continue talks with the two nations over the coming days, Axios reported, citing a regional source and a U.S. official.

Trump, who announced the naval blockade after talks broke down, is weighing resuming military strikes, the Wall Street Journal reported, citing officials familiar with the situation.

“Investors are now back to the drawing board trying to reassess the fair value of stocks now that it’s clear that there is no end in sight to the conflict in the Middle East,” said Clark Bellin, president and chief investment officer at Bellwether Wealth. “The Strait of Hormuz is key for oil prices and overall market sentiment, and it’s clear that there will be more saber rattling over this waterway between the U.S. and Iran this week.”

Hopes for a swift end to the war helped all three major benchmarks post their best week since November, following the announcement of a two-week ceasefire between the U.S. and Iran. The S&P 500 rallied 3.6% last week, while the Nasdaq jumped about 4.7%. The Dow gained 3%.

BlackRock has raised its outlook for U.S. equities, saying that a “contained” macro impact from the war as well as solid corporate earnings could create a fertile ground for future gains.