Dollar rises, stocks mixed as Iran talks stall, oil jumps

The dollar climbed in Asia and oil prices jumped as stalled U.S.-Iran talks revived fears that the Strait of Hormuz could remain constrained, a risk that quickly spilled into currencies, stocks and energy markets. U.S. stock futures wobbled, while gains in a handful of AI-related shares helped support markets in Seoul and mainland China, underscoring how geopolitics can pull investors in opposite directions at the same time.

Brent crude futures rose 2.8% to $104.06 a barrel in early trade, while U.S. crude gained 2.7% to $97.97 a barrel. The move reflected a simple market message: if diplomacy fails to keep Hormuz open, oil flows face more danger, fuel costs rise and inflation expectations can harden. That prospect helped lift the dollar against major peers even as equities looked uneven.

The deadlock centers on a scaled-back framework intended to halt the war and restore traffic through Hormuz before the harder issues are tackled. The outline discussed for the talks would move in three stages: formally ending the war, resolving the crisis in the Strait of Hormuz and then opening a 30-day window for negotiations on a broader agreement. The wider deal remains blocked by the same issue that has defeated previous efforts, Iran’s nuclear program. The last major nuclear deal was struck in 2015 and torn up by Donald Trump in 2018, leaving both sides far more suspicious in the current round.

Trump rejected Iran’s response to the latest ceasefire proposal as “totally unacceptable” after Tehran sent its answer via Pakistani mediators on Sunday. Iranian officials had proposed reopening shipping in Hormuz and ending the U.S. blockade before deferring nuclear talks, but the proposal failed to bridge the gap over control of the waterway and guarantees that any truce would hold. China has also pressed for a rapid reopening of the strait, with Beijing’s top diplomat calling for a resumption of shipping traffic and warning against a renewed round of hostilities.

The market reaction fits a pattern seen earlier this year. After U.S. and Israeli military action against Iranian targets began on February 28, shipping disruptions in Hormuz were reported on March 1, and Brent and WTI moved sharply higher as tanker traffic came under pressure. That history is helping drive the latest caution, with traders treating the current breakdown in talks as more than a diplomatic setback. It is another reminder that in the Gulf, stalled negotiations can become a global pricing event within hours.