Oil Surges 10% as Trump Blockades Iran and Seizes Hormuz

Oil just went full send. WTI crude ripped nearly 10% to $77.64 after Trump announced a full naval blockade of Iran and slapped a 20% toll on every ship passing through the Strait of Hormuz. That's a geopolitical double-punch the energy market hadn't priced in, and traders responded accordingly. Fresh US strikes on Iranian commercial vessels made it clear this isn't a bluff.

This playbook looks a lot like April's chaos. Trump has already telegraphed a speech Thursday evening, which traders are reading as setup for a longer military campaign. If you're not watching crude options overnight, you probably should be. Gold, meanwhile, sold off hard — down $121 to $3,998 — as the dollar grabbed safe-haven flows instead.

Read more Bitcoin Slides as U.S.-Iran Tensions Flare Despite ETF Demand →

The rate picture got uglier in the same session. Fed Governor Waller did a full 180 from his dovish positioning, flagging inflation risk and warning straight up: another hot core inflation print this week forces the FOMC to consider hiking. Markets listened. Rate-hike odds for the July 29 meeting jumped to 40%, and 2-year yields hit their highest level since February 2025 — before the Fed's three consecutive cuts. That's a hawkish gut-punch layered on top of a geopolitical one.

Equities took the double hit hard. The S&P 500 dropped 0.8% and the Nasdaq fell 1.7%, with chip stocks leading the pain — Intel down nearly 7%, Micron off nearly 5%. Markets closed near session lows across stocks, FX, and bonds, which is a bearish close signal you can't ignore. USD/JPY climbed steadily toward 162.50 before stalling on intervention fears, while the euro quietly gave back gains to sit around 1.1383.

Bank earnings kick off tomorrow and that's your next binary event. But right now, the Iran escalation and a hawkish Fed pivot are running the tape. Trade accordingly. Continue reading at Forexlive.