Tensions in the Strait of Hormuz Flare Up Again... Oil Prices Jump 4%, New York Stocks Fall

【Financial News, New York = Reporter Lee Byung-chul】 International oil prices surged more than 4% after reports that the Iranian parliament was reviewing a bill to restrict the passage of United States and Israeli ships through the Strait of Hormuz. As geopolitical tensions rose again, the New York stock market fell across the board, while U.S. Treasury yields and the dollar strengthened.
On the 6th local time, Iran's semi-official Fars News Agency reported that a parliamentary committee was reviewing a draft bill that would restrict the passage of ships from the United States, Israel and other 'hostile countries' through the Strait of Hormuz. The draft also includes a provision to impose fines of up to 20% of a ship's cargo value for violations.
The news sent international oil prices sharply higher. On the New York Mercantile Exchange, West Texas Intermediate crude oil (WTI) rose 3.39% from the previous session to $77.78 per barrel, while Brent crude oil climbed 4.12% to $82.72.
Will Campenol, a macro strategist at FHN Financial, said, "It is much better for the Strait of Hormuz to remain open than to be closed." He added, "However, the longer the standoff lasts, the more it could fuel inflation expectations and weigh on economic growth."
The rise in oil prices dampened investor appetite for risk assets.
The Dow Jones Industrial Average (DJIA) closed down 374.38 points, or 0.69%, at 53,974.74. The Standard & Poor's 500 Index (S&P 500 Index) fell 15.36 points, or 0.20%, to 7,708.09, while the NASDAQ Composite Index slipped 8.37 points, or 0.03%, to 26,355.07.
Investors stayed on the sidelines ahead of the U.S. July employment report due out on the 7th.
The number of new jobless claims released on the day rose slightly from the previous week, but July layoffs fell to their lowest level in two years, indicating that the labor market remains solid.
Market participants still see a chance that the Federal Reserve System (Fed) could raise its benchmark rate again next month if inflation does not cool enough. As a result, the yield on the U.S. 10-year Treasury note rose 5.06 basis points, or 0.01 percentage point, from the previous day to 4.668%.
The dollar also strengthened. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.31% to 99.97, and the dollar traded at 158.43 Japanese yen, up 0.44%.




[email protected] Reporter Lee Byung-chul Reporter