U.S. equities surged on Monday, erasing previous losses attributed to the conflict between the U.S., Israel, and Iran. Wall Street expressed optimism that the global economy could steer clear of a worst-case outcome. The S&P 500 climbed by one percent, edging within 1.3 percent of its record high earlier this year. The Dow Jones Industrial Average rose by 301 points, a 0.6 percent increase, while the Nasdaq composite saw a 1.2 percent uptick.
In Canada, the S&P/TSX composite index advanced by 183.48 points, reaching 33,879.24. Oil prices, which had breached $100 US per barrel post-failed ceasefire negotiations, moderated throughout Monday. The fluctuations were less severe compared to the volatile market movements since the conflict began in late February.
Following unsuccessful talks over the weekend, U.S. President Donald Trump threatened to blockade the Strait of Hormuz. Such a measure would further restrict global oil supply, exacerbating the existing price surge due to Iran’s disruption of traffic in the vital strait, a key route for Persian Gulf oil exports worldwide. In retaliation, Iran issued warnings affecting all ports in the Persian Gulf and the Gulf of Oman.
Brent crude, the global benchmark, surged by 4.4 percent, settling at $99.36 US, surpassing its pre-war price of around $70 US. Despite this increase, it remained below its peak of $119 US witnessed during heightened Iran war concerns, retracting from its nearly $104 US morning peak on Monday.
“Markets are finding some reassurance in the ongoing discussions between the parties and the apparent stability of the broader ceasefire,” noted Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
Simultaneously, major U.S. corporations are starting to disclose their first-quarter earnings. Strong financial results could offset apprehensions surrounding the Strait of Hormuz, as stock values generally mirror corporate profitability trends in the long term.
In the bond market, Treasury yields dipped as oil prices retreated from their earlier highs. The 10-year U.S. Treasury yield decreased to 4.29 percent from 4.31 percent at the end of the previous week.
While global stock markets experienced declines, European and Asian indexes saw drops. Hong Kong’s Hang Seng and South Korea’s Kospi recorded losses of 0.9 percent each, representing significant contractions in two major markets.
The repercussions of the U.S., Israel, and Iran conflict, reflected in escalating fuel prices, are expected to manifest in grocery stores, impacting imported produce, meat, and dairy product costs.
[Source](https://www.cbc.ca/news/business/markets-april-13-9.7161390)