Market update: Iran war uncertainty

What happened: Brent crude oil surged over $1 on Friday, settling at $83.55, due to uncertainty surrounding negotiations over control and reopening of the Strait of Hormuz. Meanwhile, U.S. stocks fell on Thursday, with the Dow losing 2.19%, S&P 500 down 1.52%, and Nasdaq Composite off 1.74%, as investors worried about the escalating conflict in Iran. PepsiCo initiated a $22M call diagonal spread, signaling a bullish bet ahead of Q3 earnings.

Market impact: The Iran war uncertainty drove oil prices higher, benefiting energy companies like Lockheed Martin (LMT) but hurting airlines like American Airlines (AAL). The conflict also increased market volatility, with growth stocks and bonds declining initially, but stocks have since recovered. The dollar wavered and fell to a 10-day low after a preliminary U.S.-Iran war deal, while the yen slid due to pension doubts.

What to watch next: Investors should monitor Brent crude oil prices around key support/resistance levels, such as $80 and $85 per barrel. Additionally, earnings reports from companies like Microsoft (MSFT) and other major U.S. corporations could provide further direction for the market. Lastly, the evolution of U.S.-Iran tensions and any potential ceasefire developments will continue to influence market sentiment.