GLOBAL MARKETS-Oil jumps after Iran’s navy says it has stopped a US warship

* Yen yoppy as traders remain cautious about intervention

* Oil up 5%

* Busy earnings week includes AMD, Super Micro

* Payroll data to shape the Fed’s policy outlook

LONDON, May 4 (Reuters) – Brent crude jumped more than 5% on Monday and the dollar strengthened after Iran’s navy said it had blocked a U.S. warship from entering the Strait of Hormuz.

US stock futures, European shares and bond prices fell.

The pan-European STOXX 600 index ended down 0.5%, while the blue-chip Euro STOXX 50 was down 1.2%.

The yield on Germany’s 10-year bond DE10YT=RR, the euro zone bloc’s benchmark, was up 4 basis points at 3.073%. Bond yields move inversely with prices. Iran’s navy blocked “American Zionist” warships from entering the Strait of Hormuz on Monday, state TV reported, while the Fars news agency said two missiles hit a US warship near Jask in the Gulf of Oman after it ignored Iran’s warnings.

Reuters could not independently verify the reports. On the social media site X, the US Central Command, which is part of the US Department of Defense, said that no ships were hit.

IRANIAN WARNING WE FORCE

Iran’s military earlier on Monday warned US forces not to enter the Strait of Hormuz after President Donald Trump said the US would begin helping free ships stuck in the Gulf because of the US-Israel war against Iran. He gave a few details of the plan.

Against this backdrop, Brent crude futures rose more than $5.00 to $113.65 a barrel, as it recovered from earlier declines during Asian trading hours.

Analysts say, however, that high prices do not last long because of their impact on demand and the economy.

“The market is being pulled in two opposing directions at the moment: on the one hand, the country’s risk increases oil and renews the fear of inflation, but on the other, the basic growth, especially in the US, is getting softer,” said Bruno Schneller, managing partner at Erlen Capital Management, a multi-family office.

The combination was driving some of the biggest markets on record in stocks, bonds and funds, he added.

MSCI’s broadest index of global shares outside Japan is still rising, led by gains in Asian stocks where South Korean shares closed up more than 5%. Hong Kong’s Hang Seng index gained 1.2%. In Europe, German automakers’ performance weakened the region’s start to the week after Trump said on Friday that Washington would raise tariffs on European cars and trucks.

The pan-European STOXX 600 fell 0.5% after posting modest gains last week. Markets in London were closed for a public holiday.

CENTRAL BANKS WARN OF DANGERS OF FINANCIAL POWER

As another tough earnings week began, concerns remained about the average investment in artificial intelligence, now at $751 billion in 2026, $80 billion above the average at the start of earnings season and 83% above spending in 2025.

Companies reporting this week include Advanced Micro Devices, Super Micro Computer, Palantir, Walt Disney and McDonald’s.

The threat of oil-driven inflation has also lifted bond yields on the challenge of balancing equity, while several central banks have turned hawkish on policy.

Market participants still do not expect the US Federal Reserve to lower rates this year and are expecting interest rate hikes from the European Central Bank and the Bank of England. Barclays on Monday joined brokerages betting the Fed will not ease rates this year. Data this week, including Friday’s April payrolls report, could change the Fed’s view.

FOREX MARKETS WARNED OF YEN INTERVENTION

In global forex markets, traders remain on edge over possible Japanese intervention to boost the currency.

The Japanese yen jumped in Asian trade, with the dollar falling sharply before paring some of the losses. Traders expected to intervene after some market players believed Tokyo had entered the market last week. The dollar was lower against the yen at 156.93, having fallen as low as 155.7 yen earlier, as traders grappled with possible interventions that analysts thought would be around $35 billion.

“But the fundamentals are still in USD/JPY’s favor, which means that USD/JPY will recover sooner or later and force the MoF’s hand again,” said Carol Kong, currency strategist at Commonwealth Bank of Australia, who added that given the size of Monday’s moves, she doubts Japan is distracted.

He pointed out that the chaos was caused by reduced market trading during the holidays.

The euro fell 0.1% to $1.17, while sterling fell to $1.3547. In commodity markets, gold fell more than 1% to $4,551 an ounce. (Reporting by Nell Mackenzie and Wayne Cole; Additional reporting by Ankur Bangerjee in Singapore; Editing by Thomas Derpinghaus, Dhara Ranasinghe and Barbara Lewis)

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