Stocks weaken and oil rises as U.S.-Iran talks strain over Hormuz

U.S. stock futures fell Sunday night while oil prices climbed after the first day of U.S.-Iran talks in Switzerland was overshadowed by President Donald Trump’s threats over the Strait of Hormuz. The market reaction showed how renewed tension around the waterway is feeding into energy prices and investor risk appetite.

Fortune reported that futures tied to the Dow Jones industrial average were down 191 points, or 0.37%. S&P 500 futures fell 0.52%, while Nasdaq futures dropped 0.74%.

Oil moved the other way. According to Fortune, U.S. crude futures rose 2.1% to $78.19 a barrel, and Brent crude advanced 1.2% to $81.53. Gold fell 1.5% to $4,180.40 an ounce.

Talks begin under pressure

Vice President JD Vance said earlier in Switzerland that negotiators had made “great progress,” Fortune reported. Vance described the U.S. position as an “outstretched hand” toward Iranians.

The tone shifted after Iran said Saturday it was closing the Strait of Hormuz again while Israel continued attacks on Hezbollah positions in Lebanon, according to Fortune. Trump told Fox News on Sunday that he had spoken with Iranian officials and warned them: “You close it and you won’t have a country. You won’t even make it back to your f--king country.”

Trump also told Fox News the U.S. might take control of the strait and collect tolls if Iran does not reach a deal, Fortune reported. He said that once a 60-day negotiation period ends, “I can do whatever I want.”

Fortune reported that Iran halted talks after Trump’s remarks, though its delegation stayed in Switzerland to continue negotiations. Lebanon remained a major obstacle, with Israeli Prime Minister Benjamin Netanyahu saying Israeli forces would remain in southern Lebanon “as long as we need to protect our people.”

Hormuz agreement faces competing claims

Trump and Iranian officials confirmed last weekend that the sides had agreed to a memorandum of understanding, according to Fortune. The arrangement reopens the strait, ends the U.S. naval blockade of Iran and starts a 60-day period for talks on issues including Tehran’s nuclear program and sanctions relief.

U.S. Central Command said commercial passage through the Strait of Hormuz remained safe and that traffic was up, Fortune reported. Central Command said U.S. forces were still in the area to support freedom of navigation and to ensure the agreement with Iran was followed.

The Joint Maritime Information Center issued an advisory Thursday saying a southern route along Oman’s coast was safe, according to Fortune. Iran’s new Persian Gulf Strait Authority, however, warned that ships must use a route set by Tehran along the Iranian coast and said alternatives were not allowed.

The Iranian authority also said vessel owners must carry insurance under its system, though it said Iran is currently covering the cost, Fortune reported. Iran said the authority reserves the right to introduce insurance fees later, with owners then required to buy and renew coverage.

Fortune reported that the dispute over Lebanon has pushed nuclear talks into the background for now. The disagreement over who controls traffic through Hormuz remains central to the fragile U.S.-Iran process.

This story draws on original reporting from Fortune.