US-Iran Ceasefire Takes Effect

Hopes for a swift resolution to the U.S.-Iran conflict faded Sunday after Tehran responded to a U.S. ceasefire proposal by insisting that talks address the war on all fronts, including Lebanon. The month-old truce is now on life support and unbelievably weak, one official told reporters.

Oil prices climbed in response with U.S. crude futures rising 2.7 percent to nearly $98 a barrel and Brent crude reaching $104. European stocks were set to open lower while U.S. equity futures also declined. Gold prices fell as investors weighed the risk of a prolonged energy crisis.

naval blockade. Nuclear issues would be discussed during a 30-day window but Tehran rejected demands to dismantle its nuclear facilities and suspend uranium enrichment for 20 years. Iran also sought the release of its frozen funds abroad. The pause in military escort operations known as Project Freedom was intended to allow time for negotiations.

A few commercial ships had successfully transited the strait under U.S. destroyer protection before the effort was halted less than two days later. Officials said the pause followed an Iranian request to pursue a deal instead. Energy Secretary told CBS News that if no clear path to a negotiated settlement emerges in the coming days the U.S. will return to military methods to reopen the strait.

The operation to clear the waterway is described as a multi-day challenge rather than a short endeavor. stock futures tied to the Dow Jones industrial average fell 0.40 percent while S&P 500 and Nasdaq futures also declined. The U.S. dollar strengthened modestly against the euro and yen.

The yield on the 10-year Treasury note held steady at 4.36 percent. lenders falling more than 3 percent each. British gilts extended gains and the pound weakened against the dollar. Asian bourses traded mixed overnight as investors monitored both the Middle East situation and fresh U.S. inflation data.

April consumer price index figures showed the annual headline inflation rate rose to 3.8 percent, the highest level since May 2023. The data added to caution ahead of several corporate earnings releases scheduled for Tuesday.

German biotech firm Bayer reported a 9 percent jump in operating profit to 4.5 billion euros for the quarter beating expectations. The company reiterated its full-year guidance even as it faces ongoing legal risk from Roundup litigation. Bayer is awaiting a Supreme Court decision expected by June on efforts to resolve thousands of lawsuits.

London-listed telecom group Vodafone posted fiscal full-year revenue of 40.5 billion euros up 8 percent from the prior year. The firm swung to an operating profit of 2.8 billion euros from a loss the year before. Growth was attributed to strong service revenue and the consolidation of a British mobile network.

Other companies reporting results Tuesday include Siemens Energy, Munich Re and Imperial Brands. Complainants can opt out until June 4.

Britain more than 70 Labour Party lawmakers joined government ministers in calling for the prime minister to resign or set a timetable for departure following poor results in local council elections. The prime minister told his cabinet he was not resigning and would focus on governing.

He noted that the party's formal leadership challenge process had not been triggered. The prime minister took responsibility for the election performance and acknowledged doubters within the party. Several ministerial aides resigned after his latest speech failed to reassure insiders.

Government bonds extended gains amid the uncertainty. The combination of geopolitical tensions over Iran and domestic political pressure in the U.K. contributed to negative sentiment across European markets at the open Tuesday.