U.S. Spring Home Selling Season Is Off to a Rough Start

The U.S. has implemented a naval blockade of the Strait of Hormuz, aiming to pressure Iran by stopping ships from entering or leaving Iranian ports. This move follows failed diplomacy and is supported by a significant U.S. naval presence, including an aircraft carrier and missile destroyers. The blockade aims to create economic pressure on Iran, possibly prompting new negotiations over Iran's nuclear program and regional threats. However, the action carries risks such as potential Iranian retaliation, which could further disrupt global oil shipments and increase prices.

The escalation with Iran has led to a rise in oil prices, with Brent crude futures around $100 a barrel. The disruption may result in Iran's 2 million barrels per day of exports being lost, which would tighten global supply, especially as Iran's main customer, China, is heavily affected. OPEC reports a significant cut in crude production, reflecting the strain on supply. The geopolitical instability hints at longer-term volatility in the oil market, even if the blockade were to be lifted soon.

U.S. stock indexes closed higher, driven by optimism that Iran and the U.S. might resume negotiations. Goldman Sachs reported a record-breaking quarter, underpinned by strong banking and trading revenues, although IPO activity slowed due to geopolitical tensions. The episode also touches on concerns about supply chain disruptions in the AI industry, where increased demand outpaces available compute power, causing some companies to raise prices and prioritize users.

The U.S. housing market experienced a disappointing start to the spring selling season, with existing home sales declining 3.6% in March, and the outlook for the rest of the year is cautious. Despite falling mortgage rates in early 2026, buyer nervousness about the economy and geopolitical conflicts, including the Iran situation, are suppressing home purchasing activity. Economists had hoped for a strong rebound, but a slowdown is now anticipated, with a potential increase of only 4% in home sales for the year.

Goldman Sachs kicked off earnings season with record profits driven by active markets and banking. Meanwhile, Meta is projected to surpass Google in digital ad revenue, boosted by new formats like Reels. These developments come amid broader economic concerns, including the impact of Middle East conflicts on market activity.

The rising demand for AI computing power has strained supply, leading companies like Anthropic and OpenAI to prioritize and charge higher prices for access. This shortage is delaying AI development and deployment, potentially slowing the pace of AI-driven innovation until infrastructure catches up with demand.