Oil prices jump, Dow futures fall on Iran Strait of Hormuz fears

U.S. stock futures fell Monday as unresolved tensions over the Strait of Hormuz pushed oil prices sharply higher. The Dow contract shed roughly 208 points, equivalent to a 0.4% decline, with S&P 500 futures also in the red at minus 0.1% and Nasdaq 100 futures hovering near breakeven.

Crude prices surged broadly, with WTI futures topping $105 a barrel and Brent crossing $111, each gaining roughly 3%. The gains softened after U.S. Central Command issued a post on X stating that "no U.S. Navy ships have been struck," contradicting Iranian media accounts of a missile strike on a vessel near Jask island.

The conflicting accounts followed the launch of President Donald Trump's "Project Freedom" initiative, which he announced in a Sunday Truth Social post. Under the plan, Washington would work to move commercial vessels from uninvolved nations through the Strait of Hormuz, a waterway Iran has shut to shipping. How the operation would actually be executed was left unexplained in Trump's post.

State television, as relayed by Reuters, quoted Iran's Navy as claiming it had turned back warships it labeled "American-Zionist" from entering a designated zone. The Fars news agency separately alleged that two missiles hit a U.S. ship after the vessel disregarded warnings — an assertion no outside party was able to verify. Adding another layer of ambiguity, a senior Iranian official cited by Reuters said only that a warning shot had been fired and that the question of damage remained unresolved.

Stock futures had slumped further — the Dow contract falling about 300 points at its worst — before recovering after the U.S. denial.

The market turbulence follows a strong stretch for equities. Friday's session added another milestone, marking the 12th time in 2026 the S&P 500 finished at a record close, with the Nasdaq Composite joining it at a new all-time high, according to MarketWatch. First-quarter results have been unusually strong, with Goldman Sachs calculating a 16% adjusted earnings gain and noting that, aside from the post-COVID reopening window, the share of companies missing EPS expectations has not been this low in a quarter century, according to MarketWatch.

Shares of European carmakers retreated after the president announced a planned increase in automobile tariffs on E.U. imports, lifting the rate to 25% from 15%. Trading was absent in Japan, Shanghai, and the U.K., all of which observed public holidays, according to The Wall Street Journal.

The April jobs report is due Friday. Forecasters tracked by Dow Jones are projecting April payroll growth of just 53,000, a steep drop from the 178,000 positions added in March, with the jobless rate seen holding at 4.3%, according to CNBC.