Reuters Morning Bid Iran deadline approaches
5 snips
Apr 7, 2026 Markets jitter as a presidential deadline on Iran draws near and no quick fix is expected. Oil prices top $100 amid worries about lasting regional damage to energy and trade. A surge in AI chip profits lifts Asian stocks and raises questions about energy use and supply-chain risk. Services data show slowing activity while prices paid spike, complicating central bank decisions.
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Markets Pricing A Prolonged Iran Energy Shock
- Markets expect no quick Iran resolution and are pricing a longer-term disruption.
- Brent and WTI holding around $100/bbl reflect damage to Middle East energy infrastructure and bottlenecks like the Strait of Hormuz.
Service Sector Slowing While Input Costs Spike
- US services slowed but inflationary pressures surged, with prices paid jumping to a 13-year high.
- ISM services showed expansion but weaker activity alongside rising input costs, complicating Fed policy outlook.
Higher Energy Prices Deepen Fed's Dilemma
- Higher oil and energy prices alongside slowing activity create a policy dilemma for the Fed.
- Elevated prices could persist even if a ceasefire occurs because of damaged facilities and constrained supply.