Hormuz Incident Sparks Oil Price Spike and US Equity Decline

A cargo ship was hit by an unidentified projectile near the Strait of Hormuz, prompting concerns that the six-month-old conflict in the region could disrupt shipments through a critical chokepoint for crude oil.

The incident led to a decline in US equities, with the Nasdaq Composite falling 133.98 points or 0.49% to 27,110.3 and the S&P 500 losing 26.34 points or 0.34% to 7,738.3.

The energy markets responded swiftly, with West Texas Intermediate crude for November delivery trading above $90 per barrel and Brent crude for November at over $100 per barrel.

The Federal Reserve's hawkish stance also contributed to the decline, with traders now seeing a 57.6% probability of a 25 basis point interest rate hike in October.