Houthi strikes on Saudi Arabia add pressure to Middle East oil routes
U.S. equity indexes opened higher on Monday as crude oil prices retreated and bond yields eased, after markets absorbed a 1.7% decline in the Dow Jones Industrial Average the prior week. The S&P 500 gained 0.6%, the Nasdaq Composite climbed 0.9%, and the Dow added 0.3% in early trading, according to United Press International.
The market advance tracked a pullback in energy prices. Brent crude, the international benchmark, and West Texas Intermediate crude, the U.S. benchmark, each fell about 3% per barrel on Monday. U.S. crude futures were trading above $96 per barrel, while Brent remained above the $100 per barrel mark.
The decline in oil prices came despite continued tensions across Middle East shipping lanes. The Houthis, a Yemeni militia supported by Iran, said they carried out missile and drone attacks on Saudi Arabia on Saturday. The group has expanded its control over the Red Sea in recent weeks, adding pressure to another chokepoint in the oil trade as the Strait of Hormuz remains under constant threat.
The U.S. State Department issued a travel alert for the Middle East, including Saudi Arabia, warning that travel is not advised due to risks of Iranian drone and missile attacks.
President Donald Trump told Fox News he would be willing to meet with Iranian President Masoud Pezeshkian during the U.N. General Assembly in New York City later this week. Trump renewed his willingness to discuss the war, according to UPI.
In the bond market, yields on 10-year Treasury notes fell three basis points to 4.94%, according to Federal Reserve Economic Data. A decline in yields typically eases borrowing costs and can support equity valuations.
The week’s trading also followed the Federal Reserve’s first interest rate increase in three years. The central bank raised its benchmark rate to a range of 3.75% to 4% after holding it at 3.5% to 3.75% since 2023.