Brent crude rises 1.5% as US stock futures drop

Brent crude advanced 1.5% and West Texas Intermediate rose 1% to $93.33 per barrel after President Donald Trump rejected Iran's latest offer to reopen the Strait of Hormuz. Iran had proposed reopening the transit passage within seven days without softening its conditions, while Axios reported that Trump expects talks to resume during the week. Trump also noted that he is very seriously considering an export ban on diesel.

S&P 500 futures fell roughly 0.2% in early Asian trading, trading down 0.1% as of 7:04 a.m. Tokyo time, after the cash index gained 0.5% on Friday. Spot gold fell 0.3% to $4,273.23 per ounce. In digital assets, bitcoin declined 0.1% to $84,426.26 and ether slipped 0.3% to $2,676.61.

Foreign exchange markets showed muted moves as the US dollar registered modest gains against most peers. The euro stood essentially flat at $1.1384, the Japanese yen traded at 157.43 per dollar, the offshore yuan was at 6.7225 per dollar, and the Australian dollar traded at $0.7018.

High energy prices continued to reinforce expectations of higher interest rates, with the average yield on a global bond index crossing 4% for the first time since 2007. Traders are fully pricing in at least one more 25-basis-point rate hike before year-end as markets await upcoming US labor reports and the Federal Reserve's preferred inflation gauge. Cleveland Fed President Beth Hammack said resilient growth, labor market strength, and government debt concerns are lifting long-term Treasury yields, while Treasury Secretary Scott Bessent urged policymakers to keep an open mind given productivity gains from artificial intelligence and deregulation.