US stocks fall after Trump's threats, Brent at $110: what's happening in the markets

Three major U.S. stock indices fell in early trading on April 7. Brent crude oil traded just below $110 per barrel: the price is almost flat compared to the close a day earlier, but is holding above the lows for the day. Investors are waiting for certainty on the deadline set by Donald Trump for Iran. Tehran has rejected the option of a ceasefire, and the U.S. president threatened the enemy with "the death of civilization" if it does not make concessions.

- The S&P 500 broad market index was falling 0.6 percent in the first minutes after the opening bell.

- The blue-chip index Dow Jones Industrial Average was down 0.7%.

- The Nasdaq Composite Technology Sector Index was also losing about 0.7%.

- The Russell 2000 index of small and mid-capitalization companies was losing 0.3%.

- The CBOE Volatility Index, known as the Wall Street Fear Index, was up 7%, above 25 points. The psychological mark indicating high volatility is considered to be 20 points.

- June futures for Brent crude were up 0.6% to $110.5 per barrel, while May contracts for U.S. WTI crude were up 2.9% at $115.6 per barrel.

- European markets were also mostly in the red zone. The Stoxx Europe 600 index was down by 0.4%, the German DAX and the British FTSE 100 - by about the same amount, and the French CAC 40 showed almost zero dynamics, then coming to a small plus, then returning to a fall.

- The spot gold price was down 0.2% to $4638.9 a troy ounce.

- Bitcoin was down about 1.4 percent to $68,400, the CoinGecko service showed.

Stocks declined and oil rose amid fears of escalating conflict in the Middle East ahead of US President Donald Trump's deadline for Iran to agree to open the Strait of Hormuz, Bloomberg reports. Trump has called on Tehran to conclude an agreement by 8:00 p.m. ET on April 7 (2:00 a.m. CET on April 8). Twelve hours before the deadline, Trump warned that "an entire civilization will die as early as tonight" if Tehran does not make concessions.

At the same time, Trump allowed for the possibility of an agreement, noting that new Iranian leaders with "a different, more rational and less radical mindset" could make a deal. "We're going to find out tonight - this is one of the most important moments in the long and complicated history of the world," he said. That said, sources tell The Wall Street Journal that negotiators are pessimistic about the likelihood of Iran agreeing to Trump's demands before the deadline.

U.S. Vice President J.D. Vance, speaking in Budapest, expressed confidence that Iran will respond in a timely manner, Bloomberg reports.

The United States on Tuesday launched more than 50 strikes on Iran's Kharq Island, through which about 90% of Iran's oil exports pass, The Wall Street Journal wrote, citing sources. The targets were military, not energy facilities: the oil infrastructure was not attacked, the newspaper's interlocutors said.

- "Investors are likely to remain on edge and markets without a pronounced trend at least until clarity by the end of the day: whether an agreement will be reached, whether U.S. and Israeli strikes will intensify, or whether Iran's response will go out of proportion," said Paul Christopher of Wells Fargo Investment Institute (quoted by Bloomberg).

- Paul Hickey, co-founder of Bespoke Investment Group, agrees: "In the absence of any movement on the diplomatic track, it will be difficult for investors to take significant risk ahead of the [US] presidential deadline, by which time Iran must open the Strait or face the wrath of the US military." Hickey's opinion is cited by Barron's. Given Trump's previous actions, the market is probably not giving much weight to his statements on social media, focusing on concrete steps - the progress of peace talks or further actions by the U.S. military, the publication notes.

- "One has to wonder how markets would behave in the case of a 'mission accomplished' headline, then in a '45-day ceasefire' scenario, and also in a 'ground operation' scenario," Bloomberg quoted Tony Pasquariello, head of hedge funds at Goldman Sachs Group, as saying.

- "We agree with the view that a full and final agreement will not be reached tonight," CNBC quoted Vital Knowledge's Adam Crisafulli as saying. In his view, Trump has a limited list of options left, with the U.S. having achieved much of its strategic objectives, negotiations ongoing, and Iran having already made small concessions on the Strait of Hormuz. Under these circumstances, the Pentagon and the Israeli army will probably not launch a campaign of large-scale destruction of civilian infrastructure today, Crisafulli believes.

- "Even if tensions ease, normalization will lag, keeping risks of higher prices and possible shortages of refined products," said Salih Yilmaz, senior industry analyst at Bloomberg Intelligence.

This article was AI-translated and verified by a human editor