Oil Spikes 10%, Stocks Slide as Trump Blockades Iran and Taxes Hormuz Ships
Trump reimposed an Iran blockade and slapped a 20% toll on Strait of Hormuz shipping, sending crude surging and stocks tumbling.
Oil just went parabolic. WTI crude ripped nearly 10% higher to $77.64 after Trump announced a full naval blockade of Iran and — here's the twist nobody saw coming — a 20% toll on every ship transiting the Strait of Hormuz. You want safe passage? Pay up. The move rattled global markets instantly and drew comparisons to the chaos of April.
Fresh US strikes on Iranian commercial ships accompanied the announcement, and Trump teased a primetime Thursday speech that traders are reading as groundwork for a longer campaign. That geopolitical shock wave hit equities hard: the S&P 500 dropped 0.8% and the Nasdaq got smacked down 1.7%, with chip names leading the carnage — Intel fell nearly 7% and Micron shed almost 5%.
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The dollar caught a double tailwind. Beyond the oil shock, Fed Governor Waller made his hawkish pivot official. He explicitly warned that another hot core inflation print this week would force the FOMC to "consider tightening monetary policy in the near term." Markets immediately priced a 40% chance of a July 29 rate hike — a number that was basically zero not long ago. Two-year Treasury yields hit their highest level since February 2025, before the Fed's three consecutive cuts.
USD/JPY grinded toward 162.50 before intervention fears put a cap on it. Gold, usually the geopolitical hedge of choice, actually dropped $121 to $3,998 — the rate-hike repricing clearly overwhelming the safe-haven bid. Bank earnings kick off tomorrow, and after a day like this, those results are going to matter even more than usual. Watch the tape closely — multiple markets closed at session extremes, which is rarely a calm signal.
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