U.S. President Donald Trump declared the ceasefire agreement with Iran over at the NATO Summit in Ankara, following Iranian attacks on three commercial vessels in the Strait of Hormuz. The U.S. had already conducted strikes on 80 Iranian military sites, and Trump vowed further military action. Iran threatened to close the Strait of Hormuz entirely and retaliated with strikes on U.S. bases in the Gulf region. Trump separately revoked a key sanctions waiver on Iranian oil sales and announced the end of the Memorandum of Understanding with Iran.
Market reactions were reported across multiple asset classes. Crude oil prices surged, with one report citing an 8% spike in WTI and Brent following Trump's NATO summit statement. U.S. equity futures sold off, with SPY and QQQ declining in response to the renewed escalation. Bond yields were also reported to have spiked.
WTI and Brent crude are the primary benchmark contracts for global oil pricing and are directly affected by supply disruption risks arising from potential closure of the Strait of Hormuz, through which a substantial share of global seaborne oil passes. The VIX, a measure of implied equity volatility, rose alongside the broader risk-off move in equities.
CENTCOM confirmed launching dozens of strikes on Iranian military infrastructure and small boats in the Strait region. Trump subsequently signalled that Iran had expressed interest in negotiating a deal, introducing conflicting signals on the trajectory of the conflict. Iran issued a statement condemning U.S. actions as a ceasefire violation.
Sources: Oilprice, Bloomberg Markets, investinglive.com, CNBC, Cnbc TOP, news.google.com, Fortune, Marketwatch TOP