US stock futures traded lower on Monday but recouped some of the losses that came after President Trump ordered a US blockade of the Strait of Hormuz following the collapse of US-Iran negotiations.

Dow Jones Industrial Average futures (YM=F) were down roughly 0.7%, or around 300 points, after sinking as much as 580 points. Contracts on the S&P 500 (ES=F) and Nasdaq 100 (NQ=F) dropped roughly 0.5% as a surge in oil prices revived concerns about inflationary pressure and potential drag on global growth.

Trump's move to block all maritime traffic through the Strait of Hormuz is poised to escalate already high tensions in the Middle East. That has piled on even more risk for markets whose hopes for a cessation in hostilities were dented by the breakdown in negotiations in Islamabad.

"Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," Trump wrote on Truth Social. The blockade is scheduled to start at 10 a.m. ET on Monday.

Iran responded by vowing to target all Persian Gulf ports if its own energy hubs are threatened, calling the US move "an act of piracy."

Oil prices jumped back above $100 on the threat to global energy flows, with global benchmark Brent crude (BZ=F) rising 9% to near $104 a barrel before paring gains to trade above $101. US counterpart West Texas Intermediate futures (CL=F) were up over 8% to top $104 per barrel.

The early Monday easing in the stock pullback and the oil rally suggests markets have regained some optimism for a diplomatic resolution to the Iran war, some analysts said. The fragile temporary ceasefire agreed last week drove a strong rally, and the truce appears to be holding as investors assess whether Trump will again fail to follow through on threats.

Attention now turns to the start of first quarter earnings season. US banks are set to begin reporting results, with Goldman Sachs (GS) kicking things off Monday, followed by Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), JPMorgan Chase (JPM), and Morgan Stanley (MS) as the week progresses.

Goldman Sachs’ (GS) profits climbed in the first quarter, fueled by jumps in M&A dealmaking and record equity trading.

But the stock dropped 3% in premarket trading as intermediation revenue for fixed income, currencies, and commodities fell short of expectations.

The prospect that the Iran war will reintensify after the failure of peace talks threatens to spark fresh volatility across global markets, after a week that saw a fragile ceasefire drive stocks up and oil down by the most this year.

Wall Street’s biggest banks are riding into the first quarter earnings season on far less certain ground than where they began 2026. This coming week, their ability to churn out more profits will once again be put to the test.