(Sept 28) : Oil advanced and US equity futures slipped after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, while saying negotiations may resume this week.

Futures for the S&P 500 Index declined around 0.2% in early Asian trading after the underlying gauge rose 0.5% on Friday. Benchmark Brent crude climbed 1.5%, while the dollar edged higher against most major currencies.

Iran stuck to its proposal to reopen the crucial Strait of Hormuz within seven days, saying it won’t soften its conditions. Trump said he expects negotiations to resume this week despite rejecting Tehran’s latest offer, Axios reported. He also said he’s thinking “very seriously” about a ban on diesel exports.

Oil remains a key driver for markets as elevated energy costs add to inflation pressures and bolster expectations for further interest-rate increases. The average yield on a gauge of global bonds has climbed above 4% for the first time since 2007, raising concerns that higher borrowing costs may eventually weigh on company earnings.

“Geopolitical developments over the weekend are likely to keep volatility elevated across global markets,” Nick Twidale, chief market analyst at AT Global Markets, wrote in a note to clients.

Volatility may persist this week, with the Federal Reserve’s preferred inflation gauge and US jobs reports set to shape expectations for at least one more rate increase this year.

Several Fed officials have pointed to resilient economic growth and a strong labour market as reasons further tightening may be needed. Cleveland Fed President Beth Hammack said those factors, along with concerns about government debt, are helping drive long-term Treasury yields higher. Traders are fully pricing at least one more 25 basis-point hike before year-end.

Treasury Secretary Scott Bessent struck a more dovish tone, saying policymakers should keep an “open mind” on rates as productivity gains from artificial intelligence and deregulation may help contain inflation.

Elsewhere, Trump was set to have dinner with Anthropic PBC Chief Executive Officer Dario Amodei on Sunday, where he planned to discuss the tech chief’s recent calls for slowing the development of new AI models.

“We’re going to talk about it,” Trump told a reporter on the sidelines of a golf tournament near Chicago. “I’m for, ‘Let’s go and let’s win.’” 

uploaded by Isabelle Francis