Crude Oil and Indices Price Outlook: Negotiations vs Hormuz Risks
By Razan Hilal, CMT | Date: 10/04/2026
Market Overview
The current market dynamics for crude oil and US indices are significantly influenced by ongoing negotiations involving the US, Iran, and Israel, as they seek a resolution to the regional conflict. The situation in the Strait of Hormuz poses risks that are contributing to price rebounds in both crude oil and US indices. Additionally, the release of the US Consumer Price Index (CPI) today is anticipated to be a critical catalyst, reflecting the inflationary pressures stemming from these tensions.
Current Price Movements
- The S&P 500 and Dow Jones have rebounded over 8% from their yearly lows, currently testing resistance levels of 6,830 and 48,000, respectively.
- The Nasdaq has seen a rebound exceeding 10% from its yearly lows, approaching the 25,200 resistance level.
- Crude oil prices have increased by more than 10% from a recent low of $85, maintaining above the $90 mark.
US CPI Expectations
The market is closely watching the following CPI expectations:
- Core CPI (m/m): Expected to rise from 0.2% to 0.3%
- CPI (m/m): Expected to increase from 0.3% to 1.0%
- CPI (y/y): Expected to rise from 2.4% to 3.4%
A reading that meets or exceeds these expectations could bolster the US dollar while exerting downward pressure on US indices and precious metals, particularly due to the elevated energy prices and insurance premiums linked to the Hormuz disruptions.
Crude Oil Price Outlook
Crude oil price action can be categorized into three key zones:
- Upper Range (Strength Continuation): Prices above $88 with potential moves towards $135, $145, and $157–160 if they exceed $110 and $118.
- Middle Range (Stabilization Zone): A drop below $84 may lead to rejection, but a confirmed break could target $82 and $74.
- Lower Range (Extended Weakness): A weekly close below $74 could indicate a move towards the $60 zone.
US Indices Price Outlook
Similar patterns are observed in the Nasdaq, S&P 500, and Dow Jones, with rebounds testing Fibonacci retracement levels. Key resistance levels include:
- Nasdaq: 25,000–25,500
- S&P 500: 6,830–6,940
- Dow Jones: 48,200–48,800
On the downside, potential pullback risks remain due to inflation pressures. Key support levels to monitor include:
- Nasdaq: 24,200–23,800
- S&P 500: 6,600–6,530
- Dow Jones: 46,800–46,200