Hormuz Deal Talk Cools Oil Prices, Markets Remain on High Alert

Stocks in the US diverged on Wednesday as news emerged that the US, Iran, and Oman may be close to an interim agreement to reopen the Strait of Hormuz. This development had a mixed impact on oil prices, with WTI crude falling by 1.1% to $74.93 a barrel, while Brent slipped just 0.3% to $79.02.

Despite this drop in oil prices, investors seemed hesitant to relax their view of the broader interest-rate backdrop. Treasury yields remained largely unchanged, with the 2-year and 10-year rates holding steady at around 4.2% and 4.62%, respectively.

The combination of a lower crude price and stable Treasury yields suggests that investors are still seeking protection against geopolitical or growth shocks. As a result, gold prices surged by 4% to $4,241.96, while silver rose 3.5% to $62.37.

ING warned against assuming the risk is gone, indicating that markets often fragment in such environments, where defensive assets remain supported and stocks move more on sector exposure and company-specific news than on a broad rally.