Oil prices jumped on Monday after US President Donald Trump rejected an Iranian proposal to end the conflict.
Brent futures rose between 2 and 4 percent to around $107-$108 a barrel, while US West Texas Intermediate climbed to about $94, as markets reacted to uncertainty over shipments through the Strait of Hormuz.
Iran had announced a peace proposal at last week’s United Nations General Assembly in New York, saying it was relayed to Washington through Qatari mediators.
Trump said on Saturday he rejected the offer, but told Axios on Sunday he expects US negotiators to continue talks this week.
The spike rekindled inflation concerns and pushed longer-dated US Treasury yields to multi-decade highs. Wall Street futures dropped, with S&P 500 and Nasdaq futures down.
“Energy has been the one consistent upward pressure on inflation, and anything that continues to put pressure on inflation is going to be something that motivates the Fed to raise rates,” Art Hogan, chief market strategist at B. Riley Wealth, said.
Nvidia limited the decline, rising over 2 percent after authorizing a $150 billion share buyback, its largest ever.
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