Ceasefire Turns into Blockade: Trump Locks Down Strait, Sparks Oil Price Surge, Market Faces Dual Test Before Earnings Season

April 13 News, The US and Iran held talks in Pakistan that lasted over 20 hours but ultimately failed to reach an agreement. Trump immediately ordered the US Navy to blockade the Strait of Hormuz, intercept all ships paying tolls to Iran, and threatened to resume limited military strikes against Iran.

On Monday, April 13, at the market open, WTI crude oil surged more than 9%, briefly rising over 10% to above $105; Brent crude futures hit a high of $103. Meanwhile, all three major US stock index futures opened down over 1%, the dollar strengthened, and spot gold gave back all of last week’s gains.

This escalation directly contradicts the risk asset inflows that followed last week’s announced ceasefire. Elias Haddad, Head of Global Market Strategy at Brown Brothers Harriman Bank, bluntly stated that Trump’s blockade “will inevitably reignite risk aversion this week.”

More complicated is that the first quarter US earnings season will officially kick off this week. Investors are currently focused on two major market risks: first, whether soaring oil prices will push up costs and erode profits; second, whether consumers will start tightening their wallets due to rising energy prices.

Overall, this week’s market will face a dual stress test of “geopolitics + earnings performance.” First, the sharp rise in oil prices will directly impact inflation expectations and consumer confidence;

Second, earnings reports will test whether corporate profits can withstand this round of shocks, especially in sectors sensitive to oil prices such as airlines, logistics, and retail.

If most US companies lower their profit outlooks during the earnings season, the market that previously rebounded due to the ceasefire in geopolitical conflicts may likely experience another downturn.

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