US and Iran halt strikes, agree to Qatar peace talks after weekend flare-up
Oil prices rose and gold fell after a weekend of tit-for-tat attacks in the Persian Gulf, before both sides agreed to cease hostilities and resume negotiations in Qatar this week.
Weekend of strikes
Since Thursday, Iran struck a container ship, a vessel carrying Qatari oil, and military bases in Kuwait and Bahrain. The US retaliated with strikes on Iranian air-defense sites and other military infrastructure. On Sunday, Iran's Revolutionary Guards said they targeted a US naval base in Bahrain and an air base in Kuwait with drones and missiles. No casualties were reported. The exchanges strained the interim ceasefire that had been in place.
- Iran strikes a container ship, a Qatari oil vessel, and military bases in Kuwait and Bahrain; US retaliates with strikes on Iranian air-defense sites.
- An oil tanker is hit; US military strikes Iranian air-defense sites and other infrastructure.
- Iran's Revolutionary Guards target US bases in Bahrain and Kuwait with drones and missiles; US and Iran agree to halt strikes and meet in Qatar.
Oil markets react
Brent crude, the global benchmark, rose as much as 1.9% to $73.39 a barrel before paring gains to around $72.40. West Texas Intermediate climbed above $70. The Strait of Hormuz, which normally carries about one-fifth of the world's oil supply, saw shipping disruptions. Iran's Foreign Minister Abbas Araghchi said on Sunday that under the preliminary peace deal, Iran has the exclusive right to manage traffic in the strait.
Peace talks resume
Late Sunday, Axios reported that the US and Iran agreed to halt strikes and meet this week in Qatar to resume talks over the Strait of Hormuz and other issues to end the war. The report, citing an unidentified US official, lifted US equity futures. S&P 500 contracts rose 0.6% and Nasdaq 100 futures gained almost 1%.
The stock market seems to believe that President Trump has no choice but to make concessions as the midterm elections approach. Investors see the exchange of attacks between the US and Iran as temporary and do not believe the situation will escalate into another war.
Broader market moves
Gold dropped 0.8% to $4,055 an ounce as higher oil prices rekindled inflation concerns. Treasury futures edged lower alongside Australian and New Zealand bonds. The dollar was steady. US gasoline prices dipped slightly to a national average of $3.87 a gallon, still about 30% higher since the war began, according to AAA. Global stocks remain on track for their best quarter since 2020, supported by optimism over the artificial intelligence trade.
What's next
Traders are also focused on South Korea's planned growth strategy unveiling on Monday, with Samsung and SK Group expected to announce investments totaling over $1.3 trillion over 10 years. Later in the week, the annual central banker conference in Sintra, Portugal, will feature Federal Reserve Chair Kevin Warsh, and US jobs reports including nonfarm payrolls are due.
