So here’s the thing about geopolitics and your stock portfolio: they’re basically dating, and right now they’re having a really messy breakup.
Over the weekend, VP JD Vance jetted off to Pakistan to smooth things over between the US and Iran. Spoiler alert: it didn’t work. After nearly 24 hours of talks that apparently went nowhere, Trump responded the way Trump responds to everything—with a Truth Social post announcing a full blockade of the Strait of Hormuz. Because nothing says “let’s negotiate” like threatening to shut down one of the world’s most critical shipping routes.
The market’s reaction? Exactly what you’d expect. Oil prices jumped 7% on Monday morning. Brent crude hit $101.75 a barrel, and West Texas Intermediate futures climbed to $103.48. Meanwhile, stocks took a collective gut punch. The S&P 500 dropped 0.25%, the Dow fell 0.5%, and the Nasdaq slid 0.3%. This is what happens when investors realize that last week’s post-ceasefire party might have been premature.
Here’s the real problem: about 20% of the world’s oil supply flows through the Strait of Hormuz. It’s basically the chokepoint of global energy. When Iran effectively closed it down back in March, oil prices went absolutely bonkers. Gas hit $4 a gallon in the US. Countries started shortening workweeks. It was chaos. The ceasefire Trump announced on April 7 was supposed to fix this—conditional on Iran reopening the strait. But when those peace talks cratered, all bets were off.
What’s wild is that WTI is now trading at a premium to Brent, which almost never happens. Why? Because traders think foreign buyers are scrambling to buy American oil as an alternative to Middle Eastern supply. Trump even posted about massive empty tankers heading to the US to load up on American crude. “We have more oil than the next two largest oil economies combined,” he wrote. It’s the energy equivalent of a flex.
But here’s where it gets tricky for investors: nobody really knows what happens next. Will Trump actually follow through on the blockade? Will Iran reopen the strait? Will there be another ceasefire? The uncertainty is the killer. As Chris Larkin from E*TRADE put it, “The stock market’s short-term fate still hinges on the uncertain progress of US-Iran negotiations and the path of energy prices.”
The silver lining? Earnings season is coming, and that might give markets something concrete to focus on besides geopolitical theater. Companies will have to explain how the war and higher energy costs have actually impacted their bottom lines. That’s real data, not speculation.
For now, buckle up. Oil prices are volatile, stocks are jittery, and nobody’s quite sure if we’re heading toward another crisis or if cooler heads will prevail. Welcome to Monday in 2026.
