Saxo strategist says 'full-blown energy crisis' is a risk after lack of progress at talks

Crypto markets hinted at substantial pain for U.S. stock futures once trading reopens Sunday evening.

S&P 500 futures and bitcoin were moving lower on Sunday, while oil was moving higher, after President Donald Trump announced a naval blockade of the Strait of Hormuz to try and put more pressure on the Iranian government.

"Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," Trump said in a Truth Social post.

In a statement late Sunday, the U.S. Central Command clarified the move, saying it will begin a blockade "against vessels of all nations entering or departing Iranian ports and coastal areas" starting Monday. U.S. forces "will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports," it said.

Hyperliquid, a crypto platform that is closed to U.S. investors, indicated a sharp drop for the S&P 500 SPX and a more than 5% climb for oil (CL.1) (BRN00) based on trading in synthetic perpetual futures contracts. Bitcoin (BTCUSD), which trades around the block, dropped 3.4%, falling below $72,000.

Trading in S&P 500 futures and oil futures for Monday's session will begin Sunday evening New York time.

S&P 500 futures trading on Hyperliquid started moving lower earlier in the day after Vice President J.D. Vance announced that a deal had not been reached during the weekend summit in Islamabad. Those moves lower have since intensified.

"We've had a number of substantive discussions with the Iranians. That's the good news. The bad news is that we have not reached an agreement - and I think that's bad news for Iran much more than it's bad news for the United States of America," Vance said at a press conference early Sunday in Islamabad, Pakistan, following 21 hours of talks.

Vance blamed the breakdown on Iran's lack of commitment over seeking a nuclear weapon or the tools to allow it to build one quickly. "The simple question is do we see a fundamental will for the Iranians not to develop a nuclear weapon not just now, not just two years from now, but for the long term. We haven't seen that yet, but we hope that we will," he said.

A foreign ministry spokesman from Iran responded that no further talks were planned, but diplomatic efforts would continue, according to reports. The two countries agreed Tuesday to a two-week cease-fire deal, seen as shaky due to disagreement over whether Israel's attacks on Iran's allies in Lebanon represent a violation of that.

The New York Times reported gaps between the two sides that include Iran's refusal to reopen the Strait of Hormuz before a deal is finalized and the fate of its enriched uranium.

Trump did not directly comment on the talks on his Truth Social account, but shared an article from a Trump-aligned news site about how the U.S. could use a U.S. naval blockade to gain control of the Strait of Hormuz. He had earlier reiterated that the U.S. had totally defeated Iran's military and assured the Strait of Hormuz "would be open soon."

In an interview on Fox News on Sunday morning, Trump took a hard line on negotiations with Iran: "I predict they come back and give us everything we want. And I told my people, 'I want everything. I don't want 90%, I don't 95%.' I told them, 'I want everything.' They have no cards," he told host Maria Bartiromo.

Read: A short-covering rally has stocks on shaky footing. Here's what could happen next.

Ahead of the talks, U.S. and global benchmark crude contracts posted the worst weekly percentage losses in nearly six years. That's as hopes for a deal helped drive the Dow industrials DJIA, S&P 500 SPX and Nasdaq Composite COMP to their biggest weekly gains since late November.

"The meeting, as expected or feared, yielded no tangible outcome, reflecting the fact that the U.S. is not negotiating from a position of strength. The lack of progress risks pushing the global market closer to a full-blown energy crisis," Saxo Bank's head of commodity strategy Ole Hansen said in a comment on X.

"From a U.S. policy perspective, the options remain constrained: a retreat, which would carry significant political cost; renewed military action, with no clear endgame; or an extension of the ceasefire to allow further negotiations," he said.

Hansen said the latter seems the most likely outcome for the near term, with Iran in a stronger position and Washington having to adjust to that. "Control over the Strait of Hormuz continues to provide Tehran with significant leverage, and there is little indication it will accept terms that weaken its strategic standing."

Patrick De Haan, head of petroleum analysts at GasBuddy, added in a social-media post that "with the U.S. not coming to agreement or terms with Iran, it is likely that the strait will remain under their control and that oil prices and thus gasoline, diesel and jet fuel prices keep rising due to the likely continued closure of the strait."

Read: What's at stake for markets as the U.S. and Iran talk this weekend

Also: Here's a look at the known damage to Gulf energy facilities as the U.S. and Iran meet for talks

Joseph Adinolfi and Mike Murphy contributed

-Barbara Kollmeyer

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