Stocks fall, oil surges after US seizes cargo vessel and Tehran wavers on peace talks

• S&P 500 and Nasdaq fell 0.2% and 0.4% respectively, while Brent crude jumped 3.9% to $93.89 and WTI rose 4.5% to $86.29
• US Navy seized an Iranian-flagged cargo ship for violating Treasury sanctions, with Trump claiming Iran fired at vessels in the strait in violation of ceasefire terms
• National average gasoline prices stand at $4.04 per gallon, over 30% higher than pre-strike levels from February, as the Strait of Hormuz (carrying 20% of global oil) remains partially restricted

Summary

Market Movement: US equities declined Monday morning with the S&P 500 down 0.2%, Nasdaq falling 0.4%, and the Dow Jones trading roughly flat as of 9:45 a.m. ET. Oil prices surged significantly—Brent crude jumped 3.9% to $93.89 and West Texas Intermediate rose 4.5% to $86.29. National gasoline prices averaged $4.04 per gallon, remaining over 30% higher than pre-strike levels from February.

Key Catalyst: Escalating US-Iran tensions drove market volatility after President Trump announced the US Navy seized an Iranian-flagged cargo vessel, damaging its engine room. The ship was under US Treasury sanctions for prior illegal activity. Trump also claimed Iran violated their ceasefire agreement by firing at foreign vessels in the Strait of Hormuz.

Peace Talk Uncertainty: Mixed signals emerged regarding negotiations. While Trump reiterated threats to bomb Iranian infrastructure following rocket attacks in Pakistan, Iranian President Masoud Pezeshkian suggested continued conflict "benefits no one." Trump indicated willingness to meet Iranian leaders in person, stating talks were expected and "nobody's playing games."

Critical Deadline: A temporary US-Iran ceasefire expires Wednesday if no peace agreement is reached.

Market Context: Wall Street is coming off strong gains from last week, with the S&P 500 and Nasdaq reaching fresh all-time highs following a ceasefire between Iran and Lebanon. The Strait of Hormuz—a critical passage for 20% of global oil supply—reportedly remains partially restricted despite Iran's claims of full reopening.

Sectors Affected: Energy sector benefited from oil price surge; broader equity markets faced pressure from geopolitical uncertainty.