President Donald Trump has shut the door on extending the temporary ceasefire with Iran, and Tehran is responding with a military threat that has oil traders on edge. The standoff is reigniting worries about the Strait of Hormuz, global supply lines, and what it all means for your portfolio.

Oil Prices Rise as Hormuz Risks Grow

The market's reaction was immediate, if not dramatic. Late Monday, Dow futures slipped 10.00 points, or 0.02%, to 53,534.00, while S&P 500 futures fell 2.25 points, or 0.03%, to 7,766.50. Nasdaq 100 futures were down 4.75 points, or 0.02%, to 30,091.25 as of around 9:28 p.m. EDT.

In commodities, the real action was in oil. WTI crude rose 0.41% to $84.85 per barrel, and Brent crude gained 0.15% to $91.01 per barrel. Natural gas futures also ticked up 0.22% to $2.696 per MMBtu.

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 99.559, down 0.02% as of around 6:34 a.m. IST. Asian markets were a mixed bag: South Korea's KOSPI jumped 3.18% to 7,199.87, while Japan's Nikkei 225 fell 0.38% to 68,956.77.

Trump Rejects Iran Ceasefire Extension

The 60-day memorandum of understanding between the U.S. and Iran expired Monday without a broader peace agreement. That deal was supposed to halt military operations and set the stage for negotiations on Iran's nuclear program and U.S. sanctions. When asked if Washington would extend the interim agreement, Trump simply said no, according to Reuters.

Iran Threatens 'Fully Offensive' Military Posture

A senior Iranian official told Reuters that Tehran would shift to a "fully offensive" posture if diplomatic efforts fail. Iran has accused Washington of not living up to its commitments under the June agreement and has warned it could take military action to challenge the U.S. naval blockade.

The core of the dispute is the Strait of Hormuz, a critical energy chokepoint where tanker traffic has been severely disrupted during the conflict. Iran argues the agreement gives it a role in managing the waterway; the U.S. rejects that interpretation.

Back-channel diplomacy hasn't completely vanished, though. Reports indicate the Trump administration has sought communication with figures connected to Iran's Islamic Revolutionary Guard Corps, even as formal negotiations remain stalled.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.