Dow falls 150 points, oil surges above $100 after Trump announces Strait of Hormuz blockade
US stocks fell Monday morning as oil surged past $100 a barrel after President Trump announced a new blockade of the Strait of Hormuz during the precarious ceasefire with Iran. The Dow Jones Industrial Average plummeted 168 points, or 0.4%, as of 10:45 a.m.ET, while the S&P 500 and Nasdaq rose 0.1% and 0.3%, respectively.
Brent crude oil futures surged 5.6% to $100.54 a barrel.West Texas Intermediate soared 5.2% to $94.19.
National average gasoline prices hit $4.13 a gallon, according to AAA.After US-Iran talks failed to yield a deal over the weekend, Trump on Sunday announced that the US would launch its own blockade of the strait, a vital maritime route in the Persian Gulf for 20% of the world’s oil.“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” he wrote in a Truth Social post.He also lobbed fresh threats at Tehran, writing that any Iranian forces who fire at vessels “will be BLOWN TO HELL” and that the US is “fully ‘LOCKED AND LOADED,’ and our military will finish up the little that is left of Iran,” if necessary.Investors had been hoping for signs of a deal to end the war in the Middle East, which has already caused the worst-ever energy supply disruption in history and driven US inflation to its highest level in two years.US Central Command announced it will start blocking traffic through Iran’s ports starting at 10 a.m.ET Monday.
It said it will not block vessels using the waterway to travel to non-Iranian ports.“Investors are now back to the drawing board trying to reassess the fair value of stocks now that it’s clear that there is no end in sight to the conflict in the Middle East.Anytime there is a repricing in markets, we see volatility,” Clark Bellin, president and chief investment officer at Bellwether Wealth, said in a note Monday. “It’s clear that there will be more saber-rattling ove...