Oil Spikes 10%, Stocks Slide as Trump Blockades Iran and Seizes Hormuz
Trump announced a full Iran blockade and a 20% Hormuz shipping toll, sending oil surging and stocks tumbling.
Oil just ripped nearly 10% in a single session. That's the headline. Trump declared a full blockade of Iran, slapped a 20% toll on every vessel transiting the Strait of Hormuz, and backed it up with fresh strikes targeting commercial ships. WTI crude settled up $6.24 at $77.64. If you weren't long energy heading into this, that stings.
The Strait of Hormuz move is the wildcard here. A toll on global shipping traffic passing through one of the world's most critical chokepoints is the kind of escalation that doesn't just rattle oil markets — it reprices risk everywhere. Gold actually sold off $121 to $3,998, which tells you the dollar-flight trade dominated. USD led all majors; AUD got crushed.
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Fed Governor Waller piled on. He did a complete 180 from his dovish tone, said his earlier jobs-market worries were wrong, and flat-out warned that another hot core inflation print this week would force the FOMC to consider hiking rates. Markets heard it loud and clear — odds of a July 29 rate hike jumped to 40%. The 2-year yield hit its highest level since February 2025, before the Fed's three consecutive cuts. The long end sold off too, with 10-year yields up 4.66 basis points on growing conviction that inflation is sticky.
Equities got hit from two sides — geopolitical shock and rate-hike repricing. The S&P 500 dropped 0.8% and the Nasdaq fell 1.7%. Chip stocks led the damage: Micron dropped 4.9% and Intel shed nearly 7%. Markets closed at session lows across stocks, bonds, and FX — that's the kind of price action that tends to follow through overnight. Trump is scheduled to speak Thursday evening, and bank earnings kick off Friday morning. Two massive catalysts in less than 24 hours. Buckle up.
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