New York Stock Exchange
New York Stock Exchange PHOTO : AFP PHOTO

Stock market futures fell Sunday night following the apparent failed talks between the US and Iran in Islamabad over the weekend.

The futures falling comes after a strong showing at the end of last week when the provisional two-week ceasefire was announced.

Stock Market Responds After Provisional Ceasefire Announced

The stock market rebounded late last week following the announcement of the provisional ceasefire between the US and Iran

According to Investors Business Daily, 'The Dow Jones Industrial Average jumped 3% in last week's stock market trading. The S&P 500 index rallied 3.6%. The Nasdaq composite surged 4.7%. The small-cap Russell 2000 leaped 4%.'

However, all of those gains that occurred last week was already making up ground lost due to six weeks of war and now that might all be for nothing due to the new blockade.

Futures Fall Across the Board

Fortune Magazine reported that: 'Futures tied to the Dow Jones industrial average fell 531 points, or 1.10%. S&P 500 futures were down 1.15%, and Nasdaq futures lost 1.32%.'

'U.S. oil futures jumped 8.63% to $104.90 a barrel, and Brent crude climbed 8.04% to $102.85. Gold fell 2.28% to $4,678 per ounce.'

'The U.S. dollar was up 0.49% against the euro and rose 0.32% against the yen. The yield on the 10-year Treasury was flat at 4.317%.'

In a report from Reuters: 'We expect renewed pressure on risk assets and upward moves in oil early this week,' said ⁠Benjamin Jones, global head of research at Invesco.

'There has been a de-escalation in the armed conflict but the scale of the de-escalation and lack of clarity ​on when trade flows will resume leaves us broadly still in the same place -- status quo -- from an economic perspective.'

What Does the Blockade Means From an Economic Perspective

Per a statement from U.S. Central Command (CENTCOM) 'US forces will begin implementing a blockade of all maritime traffic entering and exiting Iranian ports on April 13 at 10 a.m. ET, in accordance with the President's proclamation.'

'The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman. CENTCOM forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports.'

In a Truth Social post Sunday President Trump announced that '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,' President Trump said. 'I have also instructed our Navy to seek and interdict every vessel in international Waters that has paid a toll to Iran.'

In response Iran's Foreign Minister Seyed Abbas Araghchi responded on social media saying that Iran 'engaged in good faith' and that they 'encountered maximalism, shifting goalposts, and blockade.'

If this blockade ends up being something that exists in the long term rather than just a short term negotiating manoeuvre than the markets and certainly the price of crude oil will skyrocket back up to pre-ceasefire numbers considering that 20% of the worlds oil passes through the Strait.

The blockade came into effect at 8:00 a.m. EST (3:00 GMT).

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