Oil prices rise after Trump rejects Iran's latest peace proposal, but US stocks hold steady

Audio By Carbonatix

NEW YORK (AP) — Oil prices are rising as the war with Iran threatens to drag on for longer, but the U.S. stock market is nevertheless holding near its record heights. The price for a barrel of Brent crude oil rose 1.7% to above $103 Monday after President Donald Trump blasted Iran’s latest proposal to end their war as totally unacceptable. The rejection keeps the two sides in an uneasy limbo, one that has already driven the price of Brent up from roughly $70 per barrel before the war. But the S&P 500 slipped just 0.1% from its record. The Dow fell 0.1%, and the Nasdaq composite sank 0.2%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. markets hovered near all-time highs Monday and oil rose more than 2% after President Donald Trump appeared to dismiss Iran's response to a U.S. peace plan.

Futures for the S&P 500 were essentially unchanged, while futures for the Dow Jones Industrial Average ticked down 0.1%. Nasdaq futures rose 0.1%.

With corporate earnings season winding down this week, rising energy prices and new U.S. inflation data will dominate the stage, along with a high-stakes summit between Trump and Chinese President Xi Jinping.

Oil prices jumped early Monday after Trump wrote in a social media post that Iran’s response on Sunday to the U.S.’s latest proposal was “TOTALLY UNACCEPTABLE!”

Brent crude, the international standard, gained $2.71 to $104 per barrel. It was roughly $70 per barrel before the war began in late February. Benchmark U.S. crude was $2.55 higher at $98 a barrel.

With the Strait of Hormuz, a crucial waterway for global oil and gas transport, still largely closed and as the U.S. is continuing its sea blockade of Iranian ports, analysts believe oil prices are likely to remain higher for longer.

The Iran war will certainly be an important piece of the agenda during the Trump-Xi summit. China has close economic links with Iran and the U.S. has been pressing Beijing to leverage its influence to help reopen the Strait of Hormuz.

“There remains a glimmer of hope that talks between Trump and Xi later this week could yield positive results on Iran,” ING commodities analysts Warren Patterson and Ewa Manthey wrote Monday.

“The hope is that China can use its influence over Iran to push it closer towards a peace deal,” they said. “Clearly, this is easier said than done.” The oil market is still very much “heavily headline-driven,” the pair added.

In the U.S. on Monday, April numbers for U.S. existing home sales will be released. Later this week, the U.S. will release data on consumer and wholesale inflation as well as the latest retail sales figures.

At midday in Europe, Britain's FTSE 100 was unchanged, while Germany's DAX fell 0.2% and France's CAC 40 lost 1.1%.

In Asia, Tokyo’s Nikkei 225 fell 0.5% to 62,417.88 after briefly reaching another record high in intraday trading at above 63,300. Technology-focused investment holding company SoftBank Group, one of Japan’s largest stocks, fell more than 6%.

South Korea’s Kospi gained 4.3% to 7,822.24. It also hit an all-time intraday high, led by gains from tech-related stocks including Samsung Electronics and memory chip maker SK Hynix.

Technology-related stocks and growing artificial intelligence-related interest have supported markets in Japan and South Korea despite the Iran war, with the Nikkei 225 and Kospi rising more than 10% and 30%, respectively, over the past month.

Hong Kong’s Hang Seng edged up less than 0.1% to 26,406.84. The Shanghai Composite index climbed 1.1% to 4,225.02, following official data Monday that showed China’s factory gate prices rose 2.8% in April from a year ago, the highest since 2022, as well as better-than-expected export figures released over the weekend.

Australia’s S&P/ASX 200 lost 0.5%. Taiwan’s Taiex traded 0.5% higher, and India's Sensex fell 1.7%.