Oil prices spike after Trump rejects Iran truce offer

Oil prices soared and bond yields rose on Monday after Donald Trump refused an Iranian proposal of a seven-day truce, igniting worries about rising inflation. Meanwhile, stocks fluctuated as investors awaited crucial U.S. economic data. Tehran recently presented a plan at the UN General Assembly for a cessation of hostilities, which would reopen the Strait of Hormuz and alleviate a severe energy shortage driving up costs globally.

The strait is critical to the world's energy supply and is now at the heart of tensions between the U.S. and Iran, especially as Yemeni Houthis control the entire Red Sea coast, including the Bab al-Mandab Strait, a crucial shipping route.

Despite Iran's offer, the U.S. president declared on the White House grounds, "I reject their proposal." However, Trump told Axios, "They want to make a deal, but it is not the deal that I want to make. It is what we would have maybe agreed to a year ago." He added, "They overplayed their hand." Sources close to the matter reported this sentiment to Axios.