The New York stock market experienced increased volatility due to US-Iran negotiations and tensions in the Strait of Hormuz.

The likelihood of significant fluctuations in the New York stock market this week has increased, and market trends will depend on whether the US and Iran can reach further negotiations, as well as the impact that strengthened control over the Strait of Hormuz will have on international oil prices and investment sentiment.

The direct uncertainty lies in the Middle East situation. After Iran announced the temporary full opening of the Strait of Hormuz for just one day, it effectively returned to a near-blockade level of control. This strait is a key passage for global seaborne crude oil transportation, and even restrictions on passage alone are enough to trigger a sensitive reaction in energy prices and the entire financial market. Iran’s joint command of the armed forces and the Supreme National Security Council said that monitoring and control will continue until the war is ultimately over and regional peace has been confirmed. The United Kingdom Maritime Trade Operations Center reported that the Iranian Islamic Revolutionary Guard Corps attacked oil tankers transiting the strait. US media also reported that at least three merchant ships were attacked.

The problem is that military tensions and diplomatic negotiations have both become uncertain at the same time. US President Donald Trump said that progress in talks with Iran is going smoothly, but the schedule for the US-Iran second round of face-to-face negotiations has not yet been set. The market had previously predicted that the negotiations might take place around the 20th, but with the strait being brought back under renewed control, that timetable has also become unclear. With the US-Iran ceasefire deadline expiring on the 21st, investors will have to consider both a diplomatic solution and the possibility of renewed military conflict when deciding on their actions.

The stock market is already in the state after a sharp rally, making it vulnerable to minor negative news. The Nasdaq Composite Index reflects expectations for the US-Iran ceasefire talks; as of April 17, it has risen for 13 consecutive trading days. The S&P 500 Index has also rebounded at a rare speed since 1990. However, such a rapid rise in share prices over a short period may increase investors’ inclination to take profits—selling the portion that has risen to lock in gains. Craig Johnson, chief market technician at Piper Sandler, diagnosed that the stock market has not fully reflected the unstable macroeconomic reality and has entered an overheated range. In particular, crude oil prices may continue to break through $90 per barrel, which is seen as a factor that could once again stimulate inflation and raise corporate cost burdens.

On the other hand, there are also interpretations that the market’s focus will gradually shift from war-related uncertainties to corporate performance and issues in individual industries. This week, Tesla will release earnings, and considerable attention is also on what kind of business outlook and corporate valuation Elon Musk will present around the soon-to-be-listed SpaceX. Lockheed Martin is a stock that can show how Middle East conflicts affect defense and military-industrial demand, while United Airlines can reflect the extent to which rising oil prices and a slowdown in airline demand are reflected in earnings. At Blackstone’s earnings release, the private credit division—recently a source of controversy in the market—may become a focus of questions. In addition, the personnel hearing for Federal Reserve Chair nominee Kevin Wirth on the 21st is another variable. Although Republicans hold a slim advantage on the Senate Banking Committee, approval may not go smoothly if there are party defections.

In short, this week’s market needs to digest geopolitical shocks, oil price trends, corporate earnings, and uncertainties at the leadership level of monetary policy at the same time. The 3月 retail sales and existing home sales to be released on the 21st, the weekly number of new jobless claims and the April S&P Global Purchasing Managers’ Index on the 23rd, and the University of Michigan consumer confidence index and inflation expectations data on the 24th are all expected to serve as indicators for assessing economic health. Depending on whether the US-Iran negotiations make real progress, or whether tensions in the Strait of Hormuz become prolonged, these developments may either lead to a renewed recovery in risk-asset appetite or, on the contrary, push the market into a short-term correction phase.