S&P 500 rebounds as us enforces Hormuz blockade, oil jumps past $104

Markets absorb blockade shock

US Central Command confirmed that the blockade became effective at 10 a.m. ET on Monday, restricting all vessels bound to or from Iranian ports but allowing non-Iranian maritime traffic to continue. The operations at the Strait of Hormuz—the world’s critical oil chokepoint—were closely watched by energy and equity markets for potential disruption to global supply chains.

Iran had been shipping over two million barrels of oil daily prior to the blockade. Crude oil prices surged above $104 per barrel on concerns that tighter controls would squeeze supply, and US gasoline prices are now expected to climb beyond $4.25 per gallon.

Mohammad Bagher Ghalibaf, Speaker of Iran’s Parliament, called attention to the rising fuel costs, writing:

Enjoy the current pump figures. With the so-called ‘blockade’, soon you’ll be nostalgic for $4–$5 gas.

The S&P 500 had just delivered its strongest week since November with a 3.6% gain, fueled by hopes for quick diplomatic progress. However, those gains had been threatened after peace negotiations collapsed in Islamabad, leaving investors on edge.

The dramatic midday rally in equities took many by surprise and came even as the blockade continued. Analysts at the Kobeissi Letter described the swing:

The S&P 500 erases all losses and turns green on the day as the US begins its blockade of the Strait of Hormuz.

JPMorgan Chase strategist Mislav Matejka suggested buying into any weakness, as market volatility could be an opportunity. Citing possible gains over a three to twelve-month window, Matejka argued that bearish sentiment and oversold conditions might set the stage for a renewed rally.

JPMorgan Chase says investors should buy market pullbacks, arguing conditions support another V-shaped recovery despite geopolitical risks. Strategist Mislav Matejka notes volatility may persist, but a 3–12 month horizon favors adding risk as bearish sentiment and oversold signals create opportunity.

JPMorgan projects international shares, emerging markets, and small-cap stocks will outperform in the coming period, with overall market inflows likely to pick up.

Iran’s enrichment debate and strait traffic

In a parallel development, reports surfaced that Iranian authorities are considering the possibility of scaling back uranium enrichment, a move that could address a key US condition for de-escalating hostilities. Although not confirmed by Tehran, the speculation added to the rebound in stock markets.

Meanwhile, maritime analytics firm Kpler indicated that vessel traffic through the Strait of Hormuz remains well below typical levels despite a slight uptick over the weekend. Persistent uncertainty and unresolved diplomatic issues continue to limit oil flows, impacting roughly a fifth of global supply routed through the strait.

Bitcoin maintained strength above $71,000, with the cryptocurrency last trading near $71,611 for a 0.74% daily gain. Digital assets, along with other risk-on trades, have displayed steady resilience amid repeated geopolitical shocks during the ongoing standoff.

Looking ahead, market sentiment is likely to hinge on the outcome of further interdiction events at sea and any new breakthroughs in diplomatic negotiations.