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Why it’s happening: We can start with oil. Brent crude jumped more than 3% to around $108 a barrel this morning after President Trump rejected Iran’s proposal to end the war. Iran had offered to reopen the Strait of Hormuz within a week if the U.S. lifted sanctions, released frozen Iranian money, and ended its naval blockade. Trump turned the offer down on Saturday, but he said he expects more talks this week.
Stocks are set to open lower. The Dow gained 479 points on Friday, but Dow futures were down about 190 points before today’s open, as pricier oil revived worries about inflation. Those worries pushed long-term Treasury yields to new highs, and mortgage rates have been climbing along with them. The average rate on a 30-year home loan topped 7% last week.
President Trump said on Sunday that he’s “very seriously” considering a ban on diesel exports to bring down record diesel prices. Business and oil groups warn a ban could backfire and raise costs for American families and truckers.
What to watch today: The Trump administration is expected to release more details of its trade agreements with China. From what we currently know, the U.S. will sell China farm products and medical devices, while China will send everyday items that don’t raise national security concerns. Those products, from both sides, will keep flowing even if new tariffs or trade disputes come up later. Investors will also be watching for any sign that talks with Iran are back on track.
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