US Stocks Rebound as Oil Prices Surge

Equities recover from early losses as investors monitor developments in the Strait of Hormuz

Apr. 3, 2026 at 1:07am

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An extreme close-up of industrial oil refinery equipment and machinery, dramatically lit against a dark background, conceptually representing the volatility in the global energy markets.The surge in oil prices reflects the ongoing disruption to global energy supplies amid the conflict in the Middle East.NYC Today

US stocks reversed earlier losses to close higher on Monday, as investors monitored fresh developments around the Strait of Hormuz and the ongoing war in the Middle East. Oil prices also surged, with West Texas Intermediate crude up 12% to around $112 per barrel.

Why it matters

The volatility in the stock and oil markets reflects the uncertainty surrounding the geopolitical tensions in the region and the potential disruption to global energy supplies. Investors remain cautious as they assess the impact of the conflict on the broader economy.

The details

Iran is reportedly drafting a protocol with Oman to monitor traffic through the Strait of Hormuz, which it has effectively shut down since the start of the war. This would require shippers to pay tolls to Iran, according to the country's Deputy Foreign Minister Kazem Gharibabadi. However, any attempt by Iran to assert control over the international waters would be opposed by Western powers and Gulf Arab states.

  • On Thursday, President Donald Trump issued fresh threats on Iranian infrastructure in a bid to pressure Tehran in negotiations.
  • The S&P 500 Index and Nasdaq 100 both rebounded from earlier losses to close higher on Monday.

The players

Iran

The Islamic Republic of Iran, which has effectively shut down the Strait of Hormuz since the start of the war in the Middle East.

Kazem Gharibabadi

Iran's Deputy Foreign Minister, who said Iran is drafting a protocol with Oman to monitor traffic through the Strait of Hormuz.

Donald Trump

The President of the United States, who issued fresh threats on Iranian infrastructure on Thursday in a bid to pressure Tehran in negotiations.

Adam Turnquist

The chief technical strategist for LPL Financial, who commented on the impact of oil prices on equity markets.

James McCann

The senior economist at Edward Jones, who commented on the uncertainty surrounding the disruptions to global energy supplies.

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What they’re saying

“Equity markets seem to be looking past the risk of a higher embedded premium in oil and more focused on the Strait reopening.”

— Adam Turnquist, Chief Technical Strategist

“The upshot is that markets remain uncertain as to how long the acute disruptions we are seeing to global energy supplies will persist. Against this backdrop, sentiment will likely remain headline-driven in coming sessions, with volatility likely to remain elevated over the short term at least.”

— James McCann, Senior Economist

What’s next

Investors will be closely monitoring any developments in the negotiations between Iran and Western powers over the Strait of Hormuz, as well as the potential impact on global energy supplies and the broader economy.

The takeaway

The volatility in the stock and oil markets highlights the significant geopolitical risks and economic uncertainties surrounding the ongoing conflict in the Middle East. Investors remain cautious and will continue to react to headline news as the situation evolves.