President Donald Trump shredded the fragile US-Iran ceasefire on Wednesday, triggering a sharp surge in global oil prices and a broad retreat in stock markets. He declared the truce dead, threatened further military action, and revived the spectre of disruptions along the world’s most critical energy corridor.
Strait of Hormuz is back in focus as oil prices rise and stocks weaken
US crude oil jumped as high as $76 per barrel following Trump’s comments, making it the largest single-day gain since early June. It settled 4.4% higher at $73.52, taking the two-day rally to more than 7%. International benchmark Brent crude briefly touched $80 before closing up 5.2% at $78.02. The surge shows how quickly energy traders price in risk when the vital Strait of Hormuz shipping lane returns to the headlines.
Donald Trump discarded diplomatic language entirely for updates on Iran. “I think it’s over,” he told reporters on the NATO summit sidelines. “I don’t want to deal with them anymore.” He dismissed further talks as a “waste of time” and openly mused about seizing Kharg Island, the Iranian export terminal that handles the vast majority of the country’s crude shipments.
He also floated reimposing a naval blockade on Iranian tankers transiting the Strait. Oil traders read these signals as a direct threat to physical supply, and prices responded with their biggest one-day leap since early June.
Equity markets absorbed a parallel shock. The Dow Jones Industrial Average shed 577 points, while the S&P 500 slipped 0.3%. Small-cap shares bore the brunt of anxiety about consumer spending power, with the Russell 2000 sliding 0.9%. Only the Nasdaq clawed out a gain, propped up by a late recovery in semiconductor names.
Furthermore, fear of stubborn inflation rippled through bond markets too. The 10-year Treasury yield climbed towards 4.6%, a level last seen in May, as investors bet that costlier energy would force the Federal Reserve to keep borrowing costs elevated.
The rupture followed a rapid sequence of events. The US Treasury immediately revoked a sanctions waiver that had permitted some Iranian oil to reach international buyers. Simultaneously, US Central Command launched what it described as powerful retaliatory strikes against Iranian targets.
(Source: NBC News)
Originally reported by Devanshi Basu on Mandatory.
