Oil Surges 10% as Trump Blockades Iran and Taxes Hormuz Shipping
Trump reimposed an Iran blockade and slapped a 20% toll on Hormuz shipping, sending WTI crude spiking nearly 10% while stocks and bonds sold off hard.
Oil just went full risk-on in the worst way. Trump reimposed a total blockade on Iran and — here's the wild part — announced a 20% toll on every ship passing through the Strait of Hormuz in exchange for "safe passage." The US Navy said it would enforce the blockade directly. WTI crude exploded nearly 10% higher, finishing up $6.24 at $77.64. Gold, oddly, got crushed — down $121 to $3,998 as the dollar dominated everything.
This is April all over again. Fresh US strikes hit commercial ships in Iranian waters, and Trump teased a Thursday evening speech that could signal a longer campaign. Markets closed at the extremes — stocks at session lows, yields at session highs, FX at the edges. That's not a healthy tape. It's a market bracing for more.
Read more GBP/USD Hits 200-Hour MA at 1.3365: Make or Break Moment →
Fed Governor Waller poured gasoline on the bond selloff. He completely flipped his dovish script, warning that if Tuesday's core inflation print comes in hot, the FOMC needs to "consider tightening monetary policy in the near term." Traders heard him loud and clear — odds of a July 29 rate hike jumped to 40%. US 2-year yields hit their highest level since February 2025, before the Fed's three rate cuts. The long end sold off too, with 10-year yields up nearly 5 bps on embedded inflation fears.
Equities got body-slammed. The S&P 500 dropped 0.8% and the Nasdaq shed 1.7%, with chip stocks leading the carnage — Intel off nearly 7%, Micron down 4.9%. Bank earnings kick off tomorrow, which could either stabilize sentiment or accelerate the damage. USD/JPY climbed steadily toward 162.50 before stalling on intervention risk. The euro gave back early gains and closed 30 pips lower near 1.1383.
One silver lining: the June federal budget deficit came in at $120 billion versus the $138 billion expected — a beat that nobody cared about today. Watch Thursday's speech and Tuesday's inflation data. Those are your next two catalysts. Continue reading at Forexlive.
