U.S. stock futures fell and oil prices rose after peace talks between the U.S. and Iran got off to a rocky start on Sunday, with President Donald Trump wasting no time with threats to renew war.
Futures tied to the Dow Jones industrial average fell 191 points, or 0.37%. S&P 500 futures were down 0.52%, and Nasdaq futures lost 0.74%.
U.S. oil futures rose 2.1% to $78.19 a barrel, while Brent crude climbed 1.2% to $81.53. Gold dropped 1.5% to $4,180.40 per ounce.
Earlier in Switzerland, Vice President JD Vance said both sides had already made “great progress” in talks, saying the U.S. side represented an “outstretched hand” toward the people of Iran.
Last weekend, Trump and Iranian officials confirmed they agreed on a memorandum of understanding that reopens the strait, ends the U.S. naval blockade, and begins a 60-day period for both sides to negotiate other issues like Tehran’s nuclear program and relief from U.S. sanctions.
But on Sunday, the president claimed that after the 60-day negotiation window ends, “I can do whatever I want.”
While Iran halted talks after Trump’s comments, its delegation remained in Switzerland to continue negotiations. But Lebanon will remain a sticking point. Israeli Prime Minister Benjamin Netanyahu reiterated that he would keep military forces in southern Lebanon “as long as we need to protect our people.”
Until the situation in Lebanon settles down, talks over Iran’s nuclear program will take a back seat. In addition, the tug-of-war over the Strait of Hormuz will drag on.
While the U.S. ended its naval blockade on Iran as part of the MOU, Central Command also said “U.S. forces remain present and vigilant to ensure all aspects of the agreement with Iran are adhered to, obeyed, and in full force and effect.”
For its part, Tehran’s new Persian Gulf Strait Authority warned that ships must follow a regime-established route that passes along the Iranian coast and that alternatives are prohibited.
And despite its deal with the U.S. banning tolls for 60 days, the PGSA is requiring insurance that will eventually come at a cost.
“At present, this insurance is provided free of charge to the vessel owner, with all expenses covered by the Islamic Republic of Iran,” Iran said. “The PGSA reserves the right to introduce insurance fees in the future, which will be determined by the relevant insurer. Owners will then be required to purchase and renew coverage accordingly.”
