Wall Street extended its record run on Monday, April 28 (KST), as earnings optimism overpowered renewed anxiety about stalled US-Iran peace talks. The S&P 500 and Nasdaq both closed at all-time highs, while European indices slid in tandem with a sharp oil price surge driven by no sign of Strait of Hormuz relief. The calm at the top of US markets belies what comes next: four Magnificent Seven earnings reports and a Federal Reserve rate decision all arrive on Wednesday.
U.S. Markets: Records Despite Stalled Diplomacy
The S&P 500 added 8.83 points (+0.12%) to close at a new record of 7,173.91, while the Nasdaq Composite gained 50.50 points (+0.20%) to reach a fresh all-time closing high of 24,887.10. The Dow Jones Industrial Average lagged, slipping 62.92 points (−0.13%) to 49,167.79, as traditional industrials underperformed amid the oil-driven cost backdrop.
The divergence tells the story: growth-oriented tech stocks absorbed the geopolitical headwinds, while energy-cost-sensitive sectors weighed on the Dow. With four of the Magnificent Seven — Alphabet, Amazon, Meta, and Microsoft — reporting Wednesday, and Apple on Thursday, traders were clearly positioning rather than retreating.
The backdrop was hardly bullish. Over the weekend, President Trump canceled plans to send envoys Steve Witkoff and Jared Kushner to Pakistan after Iran’s chief negotiator left Islamabad without meeting US officials. Iranian Foreign Ministry spokesperson Esmaeil Baqaei stated plainly: “No meeting is planned to take place between Iran and the U.S.” The breakdown followed the first round of Islamabad talks two weeks ago, which ended without a deal.
Yet markets held. As Reuters’ Trading Day noted, “Tech [is] in a world of its own” — with investors looking past the oil shock and toward earnings season for directional cues.
Iran, the Strait of Hormuz, and Oil at $108
Brent crude rose 2.82% on Monday to $108.30 — a direct reflection of the Hormuz impasse. Tehran has signaled it would reopen the strait only if the war ends and the US lifts its naval blockade; Washington has refused to do either. Dow Chemical’s CEO noted that clearing the Hormuz logjam could take almost a year, underscoring the structural nature of the supply disruption.
Treasury Secretary Scott Bessent added that the US would not renew waivers for Iranian or Russian oil purchases, and said Iran would likely “have to start shuttering production” within days. The Treasury also sanctioned Hengli Petrochemical, a major Chinese buyer of Iranian crude, tightening the pressure further.
The US 10-year Treasury yield edged up to 4.336% (+2.6 bps), reflecting modest risk-on sentiment and pre-FOMC caution in rates markets.
European Markets: Oil Pressure Hits All Major Indices
Europe closed broadly lower on Monday, unable to escape the twin pressures of higher energy costs and a week of US event risk. All four major indices declined:
- STOXX Europe 600: 608.84 (−0.30%)
- Euro STOXX 50: 5,861.96 (−0.37%)
- FTSE 100 (London): 10,321.09 (−0.56%) — worst performer of the session
- DAX (Frankfurt): 24,083.53 (−0.19%)
- CAC 40 (Paris): 8,141.92 (−0.19%)
The FTSE 100’s underperformance reflected the UK’s particular vulnerability to high energy import costs. The UK 10-year gilt yield climbed to 4.976%, near multi-month highs, adding financial-sector pressure on top of the energy headwind. The pound edged up marginally vs. the dollar, with Reuters noting sterling’s moves were driven by Middle East and Bank of England expectations.
European equity weakness has been a consistent pattern since the Hormuz closure began. The STOXX 600 is now down roughly 3% from its April highs, as the region’s energy-import dependence translates directly into corporate cost pressures and consumer purchasing power erosion. The inflation outlook in Europe has become increasingly tied to the trajectory of crude oil and natural gas prices — both of which remain elevated with no near-term resolution in sight.
Macro Variables: What’s Driving Both Markets
Several cross-asset signals are worth tracking into the week:
- Brent Crude: $108.30 (+2.82%) — the Hormuz blockade remains the primary upside driver for oil. Any diplomatic breakthrough would be a sharp negative for crude but a significant relief for equities, especially in Europe.
- US 10-Year Yield: 4.336% — the FOMC decision on Wednesday will be the most watched central bank event of the week. The federal funds rate is widely expected to hold, but guidance on the pace of eventual cuts — and any comments on Iran-driven inflation — will move markets.
- EUR/USD: 1.1720 (+0.03%) — broadly stable, suggesting currency markets are in a holding pattern ahead of Wednesday’s dual catalyst (Big Tech + Fed).
- DE 10-Year Bund: 3.039% / UK 10-Year Gilt: 4.976% — European rates are rising modestly, limiting room for equity multiple expansion.
What to Watch This Week
This is arguably the most event-dense week of the year so far. Monday’s muted session may be remembered as the calm before the storm:
- Tuesday, Apr 28: UPS, GM, Coca-Cola, Hilton, JetBlue, Corning earnings; US Consumer Confidence data
- Wednesday, Apr 29: Alphabet, Amazon, Meta, Microsoft earnings (all after close); FOMC rate decision — likely Chair Powell’s final meeting before Kevin Warsh takes over
- Thursday, Apr 30: Apple earnings; Q1 GDP first estimate; Core PCE inflation data
- Ongoing: US-Iran diplomatic contacts — any resumption of talks (or further breakdown) will move oil instantly
For Asian and Korean investors, the key question is whether Wall Street’s record-setting resilience holds through Wednesday’s results. If Mag-7 earnings disappoint on forward guidance — citing Hormuz supply-chain disruption or consumer spending softness — the S&P 500’s record high could prove a near-term ceiling. If they beat and guide higher, a broader global rally becomes plausible.
The yield curve dynamic also warrants attention: with the 10-year at 4.336% and the Fed holding, any softening in growth data (GDP, PCE Thursday) could re-steepen the curve and shift the rate-cut narrative materially.
Track key market indicators in real time on ECONPLEX Indicators — including Fed rate expectations, Treasury yields, and oil price data updated daily.