Stock futures sink while oil spikes as the U.S. Navy looks to squeeze Iran’s economy and break its grip on the Strait of Hormuz

After a week when ceasefire hopes lifted sentiment and stock prices on Wall Street, the U.S. war on Iran could soon flare up again.

Talks between the two countries ended without a deal over the weekend, prompting President Donald Trump to announce that a naval blockade will be imposed on the Strait of Hormuz.

That would target Iranian oil shipments, which have continued flowing, while Tehran has bottled up supplies from other countries by selectively closing the strait with drone and missile attacks.

Futures tied to the Dow Jones industrial average fell 531 points, or 1.10%. S&P 500 futures were down 1.15%, and Nasdaq futures lost 1.32%.

U.S. oil futures jumped 8.63% to $104.90 a barrel, and Brent crude climbed 8.04% to $102.85. Gold fell 2.28% to $4,678 per ounce.

The U.S. dollar was up 0.49% against the euro and rose 0.32% against the yen. The yield on the 10-year Treasury was flat at 4.317%.

After the first month and a half of the war focused on aerial bombardments and missiles barrages, the next phase is poised to rely on naval forces as the U.S. follows a two-part strategy targeting Iran’s main economic lifeline as well as its control of the strait.

U.S. Central Command said the Hormuz blockade will begin on Monday at 10 am ET, and indicated it will also be selective, despit...