Oil Jumps $3 as Trump Restores Iran Sanctions, Yields Climb
WTI crude surged to $72 after Treasury yanked an Iran sanctions waiver. Yields rose, AI chips got slammed, and inflation fears aren't going away.
Oil finally got its moment today. WTI crude jumped $3.45 to close at $72.00 after the US Treasury pulled an Iran sanctions waiver — a clear signal that the fragile US-Iran framework is cracking. Earlier in the session, news of an Iranian attack on tankers barely moved the needle, adding just 80 cents. The real fuel came in the New York afternoon as bids accelerated on the sanctions headline. A large Japanese convoy had already moved through the Iran corridor — reportedly some of the last stranded oil — so the supply picture tightens from here.
Treasury yields climbed 7 basis points to 4.55% right alongside crude, which is the inflation trade talking. The dollar gained modest ground. Equities stumbled at the open but AI names briefly steadied — until they didn't. Chip stocks got hit hard, with several names shedding upward of 10% and wiping out most of June's gains. That kind of two-way violence in a momentum trade is a warning shot: the current phase of the AI rally may be stalling or resetting.
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The macro backdrop isn't doing bulls any favors either. The New York Fed's consumer survey showed one-year inflation expectations hitting their highest level since 2023. What's jarring is that oil price expectations actually fell — meaning consumers are pricing in broader price pressures beyond the pump. That's a stickier problem for the Fed. NY Fed President Williams stuck to the script, projecting steady trend-like growth without dropping any new hints on rate cuts.
On the trade front, the US deficit came in slightly better than expected at -$77.6 billion versus the -$78.5 billion estimate. Canada surprised to the upside with a May trade surplus of $4.24 billion, well above the $2.85 billion forecast. Neither number moved markets much, but the data adds to a picture of gradually rebalancing North American trade flows. Trump also floated optimism about a Ukraine settlement, though details remain thin.
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