U.S. stock futures fell after peace talks between the U.S. and Iran got off to a rocky start on Sunday, as President Donald Trump wasted no time with threats to renew war.
Futures tied to the Dow Jones industrial average fell 156 points, or 0.30%. S&P 500 futures were down 0.46%, and Nasdaq futures lost 0.52%.
But oil prices reversed earlier gains after negotiation mediators Qatar and Pakistan reported “encouraging progress” with the creation of a line of communication over the Strait of Hormuz and the a “de-confliction cell” to end fighting in Lebanon.
U.S. oil futures were flat at $76.58 a barrel, while Brent crude fell 1.45% to $79.36. Gold dropped 1.15% to $4,196.10 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.
But after Iran said Saturday that it’s closing the Strait of Hormuz again as Israel continues attacking Hezbollah positions in Lebanon, Trump told Fox News on Sunday he spoke with Iranian officials and warned them, “You close it and you won’t have a country. You won’t even make it back to your f–king country.”
He also said the U.S. may take over the strait, adding “I’ll blow the s–t out of them. If they don’t make a deal, we’ll collect tolls.”
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.
After Iran declared it closed, U.S. Central Command insisted safe passage through the strait remained intact and that traffic is up. It added that U.S. forces are still operating in the area to support freedom of navigation and pointed out that the Joint Maritime Information Center issued an advisory on Thursday affirming that a southern route along Oman’s coast is safe.
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.”
U.S. stock futures experienced a decline following a tumultuous start to peace negotiations between the U.S. and Iran, with President Donald Trump issuing strong threats regarding potential military action. Specifically, Dow Jones futures fell by 156 points (0.30%), S&P 500 futures dropped by 0.46%, and Nasdaq futures lost 0.52%. Despite these declines, oil prices, which initially rose, later stabilized, with U.S. oil futures remaining flat at $76.58 a barrel, while Brent crude decreased by 1.45% to $79.36. Gold also dropped by 1.15%, trading at $4,196.10 per ounce.
In Switzerland, Vice President JD Vance reported « great progress » in the discussions, characterizing the U.S. stance as an “outstretched hand” toward the Iranian populace. However, tensions escalated following Iran’s announcement that it would close the strategic Strait of Hormuz amidst ongoing Israeli military actions against Hezbollah in Lebanon. In response, Trump communicated a stern warning to Iran through an interview with Fox News, threatening severe consequences if they proceeded with the closure: “You close it and you won’t have a country. You won’t even make it back to your f–king country.” He further stated that the U.S. might take control of the strait and hinted at military reprisals if a deal was not reached.
Despite previous agreements on a memorandum of understanding (MOU) aimed at reopening the strait and ceasing the U.S. naval blockade, tensions flared after Trump’s remarks. The MOU included a 60-day negotiation period for both parties to discuss Iran’s nuclear program and potential relief from U.S. sanctions. However, Trump asserted that after the negotiation period, he would have the authority to take unilateral action. Iran subsequently paused its discussions but maintained its delegation in Switzerland to continue negotiations.
The situation in Lebanon remains a major barrier to progress in the nuclear talks. Israeli Prime Minister Benjamin Netanyahu affirmed that Israeli forces would remain in southern Lebanon for as long as necessary to ensure the protection of Israeli citizens. The ongoing instability in Lebanon has resulted in Iran’s nuclear program negotiations being deprioritized.
Meanwhile, the U.S. Central Command assured that navigation through the Strait of Hormuz remained safe, with traffic levels reportedly increasing. U.S. forces continue to operate in the region to protect freedom of navigation and uphold the terms of the MOU with Iran. They also emphasized that the Joint Maritime Information Center had issued an advisory confirming the safety of a southern route along Oman’s coast.
While the U.S. had lifted its naval blockade on Iran as part of the MOU, Central Command affirmed that American forces would remain vigilant to ensure compliance with the agreement. In contrast, Tehran’s newly established Persian Gulf Strait Authority (PGSA) warned that vessels must adhere to a designated route along the Iranian coast, prohibiting alternative paths.
Although the MOU with the U.S. precludes tolls for 60 days, the PGSA indicated that it would require insurance from ships, which could incur costs in the future. Currently, this insurance is provided at no charge to vessel owners, funded by the Iranian government. However, the PGSA reserves the right to impose fees determined by the relevant insurer, which would necessitate that vessel owners acquire and renew coverage as required.
In summary, while there were initial signs of progress in U.S.-Iran negotiations, the situation remains precarious, particularly due to the ongoing conflict in Lebanon and Trump’s aggressive rhetoric. The dynamics surrounding the Strait of Hormuz and Iran’s nuclear ambitions will continue to evolve as both sides navigate complex political and military landscapes.
