Morning Bid: Strait talk

By Anna Szymanski

May 4 (Reuters) - What matters in U.S. and global markets today

By Anna Szymanski, Editor-in-Charge, Reuters Open Interest

Oil prices spiked by around 5% on Monday after Iran said it had turned back a U.S. warship trying to enter the Strait of Hormuz, though the U.S. denied Iranian reports it had been struck by missiles. That came after President Donald Trump said the U.S. would begin assisting ships stranded in the strait.

Meanwhile, the yen briefly jumped against the dollar again, with traders on the lookout for further buying from Japan's Ministry of Finance after suspected intervention last week.

I'll get into that and more below.

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STRAIT TALK

Before the reports of a U.S. warship being turned back from the Strait of Hormuz on Monday, President Trump had on Sunday described a plan to free stranded vessels in the strait as a "humanitarian gesture". He left the mechanics of the operation vague, but U.S. Central Command gave a sense of its scale, saying it would provide 15,000 military personnel and more than 100 land and sea-based aircraft.

Oil markets spiked on the reported U.S. warship incident, with Brent trading at around $112/bbl and WTI at around $106/bbl. Iran had previously warned that any foreign armed forces entering the strait would be attacked.

Meanwhile, Iranian state media have reported that Washington has sent a response, via Pakistan, to Tehran's 14-point proposal to end the war - a plan that Trump said on Saturday he was likely to reject.

The lack of progress on a peace deal - with a key sticking point being the timing of nuclear talks - means the broader stalemate and disruption in the Gulf look set to continue for now.

Elsewhere, the yen strengthened abruptly again on Monday, touching 155.7 against the dollar before paring its gains. That's fuelling speculation of another round of Japanese buying after last week's apparent intervention, which may have seen the authorities spend up to $35 billion to prop up the flagging currency.

Asian stocks rose on Monday, led by South Korea's tech-heavy KOSPI, which surged nearly 5%. Chipmaker SK Hynix saw its shares rally more than 12% on U.S. tech firms' rising AI capex. Elsewhere, Japanese markets are closed until Wednesday for the Golden Week holiday.

European shares edged lower after the open, with automakers coming under pressure after President Trump said on Friday that he would hike auto tariffs again.

It's another important week for macro data and earnings. Friday will bring the latest U.S. non-farm payrolls report, with median forecasts seeing growth of 60,000 jobs in April, well under March's 178,000. The report is unlikely to revive hopes for rate cuts this year, though, after the Fed's hawkish tilt last week - as more focus is now back on the inflation side of the central bank's dual mandate.

On the earnings front, companies due to report this week include tech heavyweights AMD, Super Micro Computer and Palantir.

Elsewhere, budget airline Spirit Airlines ceased operations over the weekend after failing to secure creditor support for a U.S. government bailout plan.

The airline's collapse, which follows a doubling of fuel costs amid the Iran war, removes one of the few air travel options available to low-income Americans - and could be viewed as the first corporate casualty of the Iran war.

Chart of the day

Oil tanker traffic through the Strait of Hormuz has dropped precipitously since the start of the war. A handful of ships have transited the strait in recent days and weeks, though average flows remain well below normal.

Today's events to watch

• U.S. March manufacturers' new orders (10 a.m. EDT)

• New York Fed's John Williams speaks

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Anna Szymanski)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 4, 2026 at 6:00 AM.