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US stock index futures dropped on Monday after President Donald Trump rejected an Iranian proposal to end the conflict and reopen the Strait of Hormuz, Reuters reported. Brent futures rose 2.2 percent to $106.60 a barrel while West Texas Intermediate gained 1.8 percent to $94.11, according to trading data compiled by the wire service. The 60-day rolling correlation between oil prices and Wall Street futures reached its highest level since late May, LSEG data showed. Those concerns also lifted longer-dated Treasury yields to fresh multi-decade highs, the report added.
Gulf equity markets ended mixed in response to the developments, Reuters figures show. Qatar’s index declined 0.6 percent with Qatar National Bank falling 0.9 percent while Saudi Arabia’s benchmark dropped 0.4 percent on a 1.3 percent slide in Saudi National Bank. Dubai’s main share index gained 0.4 percent helped by an 0.8 percent rise in Emirates NBD and Abu Dhabi’s index added 0.3 percent. The moves came after Iran announced a peace proposal at the United Nations General Assembly that was relayed to Washington through Qatari intermediaries.
Trump dismissed the overture over the weekend as a sign of Iranian desperation even as he told Axios that negotiators would continue talks this week, according to the Reuters dispatch. Iran insisted that only diplomacy could solve its conflict with the United States and Israel. The rejection dashed hopes for a quick resolution to the fighting that began earlier in 2026 and has curtailed tanker traffic through the waterway that normally carries about one-fifth of global oil supply.
Preliminary data from Kpler placed Middle East crude exports at 12.8 million barrels per day in September, the highest since the war started in February. Saudi Arabia and the United Arab Emirates boosted shipments even as flows through the Strait of Hormuz remained below pre-conflict levels of roughly 20 million barrels per day. UBS analyst Giovanni Staunovo told Reuters that despite more vessel traffic the market stays undersupplied.
The price spike reinforced expectations that central banks may keep interest rates elevated for longer, a Reuters assessment found. US-listed shares of precious metal miners declined sharply in premarket trade with Gold Fields sliding 16 percent as higher yields weighed on non-yielding assets. Dow E-minis were down 0.36 percent, S&P 500 E-minis fell 0.49 percent and Nasdaq 100 E-minis dropped 0.98 percent at early levels, the service reported.
Oil prices have yo-yoed throughout the year on shifting expectations around the strategic waterway, with Brent recently trading near levels seen before the conflict intensified. A McKinsey analysis of energy security beyond the Hormuz crisis placed baseline flows at 21.3 million barrels per day before residual disruptions and inventory draws widened the supply-demand gap. The latest setback leaves markets focused on whether any eventual reopening will be full or partial, according to trading desks cited in the coverage.
