Wall Street indices closed higher on Monday as investors reacted to optimism regarding a potential agreement between Washington and Tehran, despite heightened tensions following a U.S. blockade of Iranian ports.
The Dow Jones Industrial Average rose 0.63%, the Nasdaq Composite gained 1.23%, and the S&P 500 climbed 1.02%, according to AFP. These gains reversed early losses seen during the market opening.
Oil prices surged toward the $100 mark as conflict escalation in the Middle East drove energy demand. Brent crude prices peaked at $103.87 during the session before settling at $99.36, a 4.37% increase.
West Texas Intermediate (WTI) closed at $99.08, up 2.60%. The Mexican export blend stood at $90.68 per barrel.
Geopolitical tensions and supply risks
The price surge followed the announcement of a U.S. blockade on vessels at Iranian ports, a move that threatens the country's crude exports. Iran labeled the measure "illegal" and warned of potential retaliations within the Gulf region.
Energy prices stabilized late in the day after President Donald Trump reported that 34 ships successfully crossed the Strait of Hormuz on Sunday. The strait serves as a critical artery for approximately 20% of the world's petroleum supply.
OPEC also lowered its second-quarter demand growth forecast by 500,000 barrels per day, citing regional uncertainty.
In North America, investors are monitoring recent inflation data. Monex analysts noted that Mexico’s annual inflation reached 4.59% while the U.S. rate hit 3.3%.
These figures complicate the outlook for central bank monetary policy. While markets expect interest rates to remain stable in the short term, analysts suggest further upward adjustments could occur by year-end if inflationary pressures persist.
