Market Anxiety Shifts from Fed to Iran as Strait of Hormuz Crisis Deepens

The recent release of the U.S. Consumer Price Index (CPI) has left investors and experts alike on edge, but it seems they're not waiting for the Federal Reserve's next move to make their decisions. Instead, many are focusing on the escalating tensions between the U.S. and Iran, particularly with regards to control over the Strait of Hormuz.

The July CPI results showed a 3.4% year-over-year increase in prices, down from 3.5% in June, and core CPI rose 2.5% year-over-year, also lower than June's 2.6%. These numbers were within market expectations, but the expected rally on Wall Street didn't materialize.

Analysts point out that there is still one more inflation data release before the September FOMC meeting, leaving room for conditions to change. The market is paying close attention to the possibility of inflation rising in August due to the recent rebound in international oil prices.

The Strait of Hormuz situation is becoming increasingly critical, with only 14 ships passing through on August 11, compared to an average of 33 ships a day in June and 26 in July. Iran's limited drone and missile attacks are fueling anxiety among shipping companies and insurers.