Trump Rejects Iran’s Peace Proposal: Oil Climbs, the Dollar Firms and Gold Falls as Rate-Hike Bets Build
- September 28, 2026
- Posted by: Neeraj Pandey
- Category: News
Brent up to about $106, WTI near $93.5. Dollar index 101.15, up 1.7% in September. Spot gold down 1.5% to $4,223.95. Euro $1.1379, sterling $1.3232.
Quick Answer
US-Iran peace talks are stalled after President Donald Trump rejected an Iranian proposal to end the conflict and reopen the Strait of Hormuz, pushing Brent crude up 1.3 to 1.8 percent to about $106 a barrel on 28 September 2026. The dollar held near a two-month high at 101.15 on the dollar index, and spot gold fell 1.5 percent to $4,223.95 an ounce as higher oil raised inflation worries and bets on further Federal Reserve rate hikes. For India, the combination pressures the rupee, import costs and foreign flows.
Oil prices rebounded on Monday after Trump rejected a peace deal from Iran that Tehran had delivered through Qatari mediators and presented at the United Nations General Assembly last week. Trump told reporters, “They made a proposal but I rejected it,” and later said he expected US representatives to hold further talks this week.
The Wall Street Journal reported that Trump turned down Iran’s conditional offer to reopen the Strait of Hormuz and told aides he expects US strikes on the country to resume after the November midterm elections. The conflict began with US and Israeli airstrikes on Iran on 28 February, and it has kept oil and shipping risk elevated since then.
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Oil: Brent Climbs as US-Iran Peace Talks Stall
Brent crude futures rose $1.32, or 1.27 percent, to $105.64 a barrel early in the session and later reached $106.14 to $106.31, while US West Texas Intermediate rose to about $93.6. Brent gained 0.4 percent over the past week while WTI fell 7.9 percent, and the gap between the two widened to its largest since May, at roughly $12.5 a barrel.
The supply picture is fragile. A Saudi-led coalition said it intercepted two ballistic missiles and two drones launched by the Houthis toward the kingdom on Saturday, and the Houthis are backed by Iran. Any threat to shipping through Hormuz or to Saudi facilities can move prices sharply because of the volume of oil that passes through the region.
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The Dollar and Bond Yields
| Indicator | Level |
|---|---|
| Dollar index | 101.15, up from 100.95 earlier in the day |
| September change | Up 1.7%, best month since June |
| Euro against dollar | $1.1379, down 0.1% |
| Sterling against dollar | $1.3232, down 0.1% |
| US 10-year Treasury yield | Around 5.2%, highest in 20 years |
The euro and sterling are both near multi-month lows against the dollar. A rise in oil prices lifts inflation expectations, which supports the case for further Fed tightening and pushes yields up, and higher yields attract capital toward dollar assets.
Gold: Why the Safe Haven Is Falling
Spot gold fell 1.5 percent to $4,223.95 an ounce and US gold futures fell 1.5 percent to $4,257.90. Gold pays no interest, so when real yields rise and the dollar strengthens, holding it becomes more expensive, and that overrides its usual role as a hedge against geopolitical risk.
The fall shows how much the market is focused on inflation and rate hikes rather than on fear alone. Oil rising because of conflict, and gold falling because of rate expectations, is the pattern of an inflation shock and not of a pure flight to safety.
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What the Stalled US-Iran Peace Talks Mean for India
| Channel | Effect |
|---|---|
| Rupee | Opened near 95.88; RBI defending 96 |
| Inflation and import bill | Brent above $105 raises costs for a heavy crude importer |
| Equity market | Nifty below 23,000 and foreign investors have sold Rs 17,131 crore in September |
| Sectors | Banks, metals and real estate under pressure; IT and pharma relatively firm |
India imports most of its crude, so a sustained price above $100 affects the trade balance, fuel costs and inflation, and limits the room for policy support. The rupee is the first place it shows, and equities follow when foreign investors reduce exposure.
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Scenarios to Watch This Week
- Talks resume: Trump said he expects further discussions this week, and any progress toward reopening Hormuz could lower oil and ease pressure on the dollar and yields.
- Escalation: attacks on Saudi Arabia or a breakdown in talks could push Brent higher and extend the rate-hike scare.
- US data: a data-packed week for inflation and central bank signals will decide whether yields rise further.
- Midterm timeline: reports that Trump expects strikes to resume after the midterms point to a prolonged standoff, which keeps a risk premium in oil.
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Conclusion
The US-Iran peace talks have stalled, and the market reaction is a clear chain: oil up, inflation fears up, rate-hike bets up, the dollar and yields up, and gold down. For India the same chain shows up in the rupee near 96, foreign selling and a weak Nifty. Follow oil, the dollar index and US yields for early signals, and track how Indian stocks respond on the Univest Screener.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data independently before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
What happened in the US-Iran peace talks?
Ans. President Trump rejected an Iranian proposal to end the conflict and reopen the Strait of Hormuz, though he later said he expected further talks this week.
How much did oil rise today?
Ans. Brent crude rose 1.3 to 1.8 percent to between $105.64 and $106.31 a barrel, and WTI rose to about $93.6.
Why did gold fall while tensions rose?
Ans. Higher oil prices raised inflation concerns and bets on more Federal Reserve rate hikes, which strengthened the dollar and lifted real yields, making gold costlier to hold.
What is the dollar index level?
Ans. The dollar index was about 101.15, near a two-month high and on track for a 1.7 percent gain in September, its best month since June.
How does this affect the Indian rupee?
Ans. Higher oil raises dollar demand from importers, and a stronger dollar and higher US yields pull capital away, so the rupee opened near 95.88 with the RBI defending 96.
When did the conflict begin?
Ans. The conflict began with US and Israeli airstrikes on Iran on 28 February 2026.
What could lower oil prices if the US-Iran peace talks progress?
Ans. Progress in talks toward reopening the Strait of Hormuz, or a sustained easing of supply risks, could lower oil prices.
