Market Data 
Investing.com – A U.S. blockade of the Strait of Hormuz is dominating the debate as the new trading week gets underway, with the prospect of more constraints to shipping through the vital waterway driving up oil prices once again. More U.S. inflation data could provide a glimpse into the impact of the war on prices, while the conflict could factor into a slew of upcoming earnings from Wall Street banks and European luxury players.
1. U.S. to begin Hormuz blockade
The U.S. military has said that it will start a blockade of the Strait of Hormuz at 10 a.m. Eastern on Monday for vessels “entering or departing Iranian ports and coastal areas,” following an order from U.S. President Donald Trump in the wake of failed weekend negotiations with Iran.
But the Pentagon noted that ships moving through the strait that are not destined for or departing from Iranian ports will be allowed to sail.
The developments came after the U.S. and Iran finished 21 hours of negotiations in Pakistan without an agreement to solidify an ongoing two-week halt to hostilities. U.S. Vice President JD Vance, who led the American delegation during the discussions, said Iran had refused to accept U.S. demands to refrain from developing a nuclear weapon.
Iran did not immediately provide a comment on the talks, although Pakistan — which has served as a mediator — stressed that both sides must “uphold their commitment to ceasefire.”
Meanwhile, Israel and Lebanon are scheduled to hold their own talks in Washington this week. Strikes by Israel — which launched a joint campaign on Iran in late February — on Iran-aligned Hezbollah targets Lebanon have cast doubt on the force and longevity of a wider Middle East ceasefire.
2. Oil moves back above $100 a barrel
Oil prices rose on Monday, spiking once again above the $100 a barrel threshold.
Brent crude futures, the global benchmark, was last higher by 6.7% at $101.65 a barrel, while U.S. West Texas Intermediate crude futures had jumped by 7.1% to $103.42 a barrel.
Despite the climb, analysts at Pepperstone suggested that the market reaction to news of a U.S. blockade had been “relatively contained,” as market participants “view the move largely as a negotiating gambit” from Trump.
“I’d not be at all surprised to see risk assets remain underpinned to a degree, with continued hope that a deal can be agreed likely to continue to encourage dip buying, even as crude benchmarks are likely to grind steadily higher as physical supply tightens further,” said Michael Brown, Senior Research Strategist at Pepperstone, in a note.
Following the initial announcement of the ceasefire last week, which itself came after Trump threatened to destroy all of Iranian “civilization” should the Strait of Hormuz not be reopened, crude prices fell below $100 a barrel. Still, oil hovered well above pre-war levels.
3. U.S. PPI
Central to the concerns around the surge in oil prices has been its knock-on effect on inflation in countries around the world, and how that could subsequently impact central bank interest rate policy decisions.
Investors will have the chance to parse through more inflation data this week, including U.S. producer prices for final demand. Crucially, the PPI gauge will cover March, the first month that fully included the war in Iran.
Last week, U.S. consumer price growth accelerated sharply in March, largely driven by a spike in energy costs due to the Iran war, although the increase had been widely anticipated by markets. Energy prices, in particular, spiked by 12.5% on an annualized basis, up dramatically from 0.5% in February.
However, stripping out volatile items like food and fuel, so-called “core” CPI stood at 2.6% year-on-year and 0.2% month-on-month, both slower than forecast.
Given the relatively tepid core number, analysts have suggested that the Federal Reserve, which relies on inflation metrics when setting interest rates, may choose not to put too much weight on the reading. How the next batch of inflation shakes out could offer more insight into the approach of the Fed to rates in the months ahead.
“A stronger-than-expected [PPI] reading would reinforce the case for a ‘higher for longer’ rate outlook, likely supporting the dollar and leaving EUR/USD’s recent rebound vulnerable to renewed downside,” Laurence Booth, Global Head of Markets at CMC Markets, told Investing.com.
4. Bank results in focus
Earnings from major Wall Street banks will be in focus this week, beginning with quarterly results from prior to the opening bell later today.
Shares of the firm have risen by around 3% so far this year. Trading activity has been bolstered by worries over disruptions caused by new artificial intelligence tools have led some investors to restructure their positions, while revenues have climbed at one of Goldman’s other key businesses, investment banking.
Yet it is the war in Iran that may dominate Goldman’s report. Although ructions in global financial markets caused by developments in the Middle East can increase trading revenues, higher commodity prices could also persuade companies to shy away from possibly expensive ventures like mergers and acquisitions — potentially denting advisory fees charged by Goldman.
Other major banks due to report this week include , , , and .
Beyond banks, other big-name earnings will be unveiled from streaming titan Netflix and beverage group PepsiCo.
5. European luxury earnings ahead
At the same time, earnings from Europe will also be in the spotlight.
, the world’s largest luxury goods name and the parent of labels like Louis Vuitton and Dior, is set to report first-quarter sales today, with the Iran conflict also likely to be a key factor in the firm’s outlook. Peers and are also due to report this week.
Sales at brands owned by LVMH and its rivals have declined in destinations like Dubai and Abu Dhabi because of the Iran conflict, in a setback for the $400 billion luxury industry, Reuters has reported.
Elsewhere, is also set to deliver its latest earnings on Wednesday, as the Dutch chip equipment giant faces some questions from analysts around its ability to meet soaring demand from artificial intelligence semiconductor manufacturers.
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