U.S.-Iran Tensions Drive Stocks Down, Oil Up

Brent crude futures rose 0.6% to $110.41 a barrel, and U.S. West Texas Intermediate crude climbed 3.1% to $115.84 a barrel. President Trump reiterated threats of U.S. attacks on Iranian bridges and power plants if the Strait, through which a fifth of the world's oil passes, remains closed.

Iran, citing Reuters, stated no negotiations were occurring and warned of "complete darkness" for the region if attacked, also threatening to close the Bab-el-Mandeb waterway. The Wall Street Journal reported over 50 U.S. strikes on Iran’s Kharg island.

Dan Coatsworth of AJ Bell highlighted a binary outcome: a market rally from de-escalation or a major escalation with severe financial market implications. The conflict's economic impact is evident, with the U.S. services sector expanding slower than anticipated in March and prices paid spiking.

Deutsche Bank expects the March CPI report to show a 0.95% monthly gain in headline CPI, raising the annual rate to 3.4%. In corporate news, Broadcom (AVGO) rose over 3% after securing a long-term AI chip development deal with Google (GOOGL) and an agreement to provide AI computing capacity to Anthropic.

U.S. health insurers, including UnitedHealth (UNH) and Elevance Health, jumped nearly 10% and 9% respectively, following a higher-than-expected 2027 rate increase finalized by the Centers for Medicare & Medicaid Services. Delta Air Lines (DAL), United Airlines (UAL), and JetBlue Airways (JBLU) raised checked bag fees to offset rising jet fuel costs.

UBS Global Research warned that derivative trading and CTA flows are acting as "price movement amplifiers," increasing market volatility, with CTAs remaining bearish on equities.