Oil prices logged fresh gains and stocks tumbled on Monday as traders assessed the possibility that the Iran war could heat up again.
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Oil extended its rise from earlier in the day after reports that Iran had launched missiles at the United Arab Emirates for the first time since the ceasefire went into effect in early April.
Brent oil was up about 6% to $114.60, while WTI oil rose 4% to $105.57.
The UAE’s Ministry of Defense said that four missiles were launched from Iran. The government agency said it intercepted three missiles and that the fourth went into the Persian Gulf.
Four cruise missiles launched from Iran were detected toward various areas across the country. Three were successfully engaged over the country’s territorial waters, while one fell in the sea.
The Ministry of Defense affirmed that the sounds heard in different parts of the… pic.twitter.com/ugwPRCcY24
— وزارة الدفاع |MOD UAE (@modgovae) May 4, 2026
Major indexes tumbled after wavering earlier in the session. Bond yields spiked, with the 10-year US Treasury yield up seven basis points to 4.45%
Here’s where major indexes stood around 12:50 p.m. ET:
The strikes come during an indefinite ceasefire extension amid talks between the US and Iran. Israel has also reportedly violated the ceasefire agreement.
In response to Iran’s latest peace proposal, US President Trump recently said he “can’t imagine that it would be acceptable in that they have not yet paid a big enough price for what they have done to Humanity.”
Trump said in a Truth Social post on Sunday that the US military will escort third party ships out of the Strait of Hormuz in what the president called “Project Freedom.”
In response, Ali Abdollahi, the head of the Iranian military’s unified command, warned that US ships in the Strait of Hormuz will be attacked, according to reporting from Aljazeera.
Some commenters online tossed around a new replacement for the TACO trade, saying the new phrase to describe the latest phase of the war is NACHO.
The TACO trade is over. It’s now the NACHO trade.
Not A Chance Hormuz Opens.
— Dennis Dick, CFA (@TripleDTrader) May 4, 2026
Former JPMorgan quant Marko Kolanovic reacted to news of the UAE strikes on X, saying the US has to respond.
US simply has to respond to these large attacks on UAE. This is much worse than just “misbehaving ” and Trump said he will strike in that case. Otherwise US loses all credibility, can just pack up and leave.
— Marko Kolanovic (@markoinny) May 4, 2026