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March 31, 2026 – 01:42

(Bloomberg) — Crude oil extended gains and US equity-index futures dropped after Iran struck a Kuwaiti crude oil carrier as the war in the Middle East showed little sign of easing.

West Texas Intermediate crude oil rose 3.4% to more than $106 a barrel after the attack while the carrier was in the anchorage area of Dubai’s port. Futures contracts for the S&P 500 Index fell 0.3% after the underlying gauge dropped on Monday to the lowest level since August, leaving it less than 1% away from a correction. Asian shares were also poised to follow suit, with Australian equities opening weaker.

The dollar, which has emerged as the haven of choice since the war started, was a touch stronger on Tuesday.

The war in the Middle East has upended global markets and triggered concern about a simultaneous spike in inflation and slowdown in economic growth. The conflict has severed a crucial route for energy supplies, boosting oil prices and driving the S&P 500 toward its worst month since 2022.

Tensions showed little signs of abating with President Donald Trump saying that if Tehran doesn’t re-open the Strait of Hormuz, “we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating” electricity plants, oil facilities and “possibly” desalination infrastructure.

Elsewhere, Treasuries advanced on Monday after Federal Reserve Chair Jerome Powell downplayed near-term inflation risks from higher energy prices.

Treasuries trimmed what’s expected to be their worst monthly selloff since 2024 as Powell said longer-term inflation expectations appear to be in check, with traders erasing wagers on a rate hike. Inflation expectations are “well anchored beyond the short term,” Powell said Monday, adding policymakers may need to respond to fallout from the conflict, though not yet.

Yields on Australian and New Zealand bonds declined early Tuesday, tracking the moves in Treasuries.

“Powell’s calm tone along with overdue market focus on the growth risks from higher-for-longer oil are helping to fuel a turn in rates pricing,” said Krishna Guha at Evercore. “The probability of one or more cuts is much higher than the probability of a hike.”

Meanwhile, the Nasdaq 100 is trading 12% below its October record. The rout was spurred by concern that surging oil prices from the war in the Middle East could choke off economic growth and reignite inflation.

“The market continues to be headline-driven as the Trump Administration has delivered a variety of messages surrounding de-escalation and re-escalation of the war in Iran,” said Chris Senyek at Wolfe Research. “As such, we maintain our defensively positioned posture.”

Meantime, the trading desk at Goldman Sachs Group Inc. said signs of capitulation are starting to emerge among hedge funds, and the systematic community is running out of steam. It anticipates that trend-following investor CTAs will be buyers in every scenario over the next month.

Corporate Highlights:

Morgan Stanley’s E*Trade unit is in talks with SpaceX to lead the sale of IPO shares to small investors, potentially being favored over rival brokerage platforms from Robinhood Markets Inc. and SoFi Technologies Inc., Reuters reported, citing two people familiar with the matter. Fannie Mae and Freddie Mac pared a months-long slide after Bill Ackman, who has bet heavily on the companies, called the mortgage-finance giants “stupidly cheap.” Sysco Corp. is acquiring Jetro Restaurant Depot LLC, the closely held wholesaler founded by billionaire Nathan “Natie” Kirsh, for $29.1 billion including debt in a deal that will create one of the largest food-service groups in the US. US regulators have approved a high-dose version of Biogen Inc.’s drug for a rare muscle disorder, giving the company a boost as it competes with a gene therapy from Novartis AG. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 8:37 a.m. Tokyo time Hang Seng futures fell 0.2% Australia’s S&P/ASX 200 fell 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1456 The Japanese yen was little changed at 159.82 per dollar The offshore yuan was little changed at 6.9187 per dollar The Australian dollar fell 0.1% to $0.6845 Cryptocurrencies

Bitcoin rose 0.1% to $66,690.12 Ether rose 0.1% to $2,024.82 Bonds

Australia’s 10-year yield declined four basis points to 5.03% Commodities

West Texas Intermediate crude rose 3.1% to $106.05 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

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