Oil Surges 10% as Trump Blockades Iran, Imposes Hormuz Toll
Trump announced a full Iran blockade and a 20% shipping toll on the Strait of Hormuz, sending oil spiking and stocks sliding.
President Trump escalated military and economic pressure on Iran Wednesday, announcing a full naval blockade of the country and imposing a 20% toll on all commercial goods transiting the Strait of Hormuz in exchange for guaranteed safe passage — a move that rattled global markets and drew immediate comparisons to the tensions of April. The U.S. Navy confirmed it would enforce the blockade, while fresh strikes targeted commercial ships in the region. Trump signaled more to come, scheduling a speech for Thursday evening that analysts expect will lay out a broader strategic campaign.
Crude oil surged nearly 10% on the news before trimming some gains, with WTI settling up $6.24 at $77.64 per barrel. The shock rippled across asset classes: gold fell $121 to just below $4,000, the S&P 500 dropped 0.8%, and the Nasdaq tumbled 1.7%. Chip stocks bore the brunt of equity selling, with Intel off nearly 7% and Micron down close to 5%.
Read more Johnson & Johnson Q2 Earnings Set to Test Its Growth Story →
The dollar strengthened broadly as Federal Reserve Governor Christopher Waller delivered remarks that completed what traders described as a full reversal of his previously dovish posture. Waller warned that another hot core inflation reading this week could force the FOMC to consider tightening policy at its July 29 meeting. Markets responded by pushing the odds of a July rate hike to 40%, while 2-year Treasury yields climbed to their highest level since February 2025 — before the Fed's three consecutive rate cuts.
On the fiscal side, the June federal budget deficit came in at $120 billion, notably below the $138 billion consensus estimate, offering a modest bright spot amid the broader turbulence. In currency markets, the dollar's advance was tempered against the yen, with USD/JPY stalling near 162.50 as intervention risk from Japanese authorities kept bulls cautious. The euro slipped 30 pips to 1.1383 after an early European session pop faded.
Traders are watching Thursday's bank earnings closely as a potential market catalyst, even as the day's close — with stocks near session lows, bond yields at highs, and currency moves at extremes — signals the kind of one-directional pressure that rarely resolves quickly. Continue reading at Forexlive.
