Global markets reversed course, with equities and crypto falling while oil surged, after President Trump’s address on Iran left the crucial question of the Strait of Hormuz’s reopening unanswered.
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Global stocks fall after Trump’s speech leaves 1 key question open
(P1) Global equities and leading cryptocurrencies fell on Thursday while oil prices jumped over 4% after a prime-time address by U.S. President Donald Trump failed to provide a concrete timeline for ending the conflict with Iran and reopening the critical Strait of Hormuz.
(P2) The market reaction served as a "clear market reality check following the earlier optimism for an imminent ceasefire," said Alberto Bellorin at InterCapital Energy. He noted the speech lacked a "concrete timeline" for the reopening of the strait, which now looks "months away rather than weeks."
(P3) The risk-off move was broad. In Asia, Japan’s Nikkei 225 fell 1.9% and South Korea’s Kospi dropped 3.5%. U.S. stock futures pointed to a lower open, with contracts for the S&P 500 down around 1%. In commodities, Brent crude surged 4.8% to $106.02 a barrel, while West Texas Intermediate climbed 4% to about $104. Meanwhile, haven demand pushed 10-year Treasury yields down to 4.28%.
(P4) The core issue for investors is the continued closure of the Strait of Hormuz, a chokepoint for about 20% of the world's energy supplies. Without a clear path to resuming normal shipping, the conflict threatens to keep energy prices elevated, fueling inflation and weighing on global economic growth, particularly in Asian nations heavily dependent on Middle East oil.
Hormuz Reopening Remains Key Question
During the address, President Trump struck a victorious tone, stating his objective of preventing a nuclear-armed Iran "has been attained." However, he simultaneously called on other nations to take the lead in securing the strait, effectively signaling that a swift U.S.-led resolution to the shipping disruption is not forthcoming.
This leaves a major uncertainty for markets, which had rallied on hopes of a quick de-escalation. "Trump has signalled that the war is likely to continue, prompting investors to expect that oil supplies will remain tight," said Tina Soliman-Hunter from Macquarie University.
The situation draws parallels to the U.S.-China trade war, where markets moved on presidential declarations of victory, only for the underlying issues to persist. However, the blockage of a major energy artery provides a much clearer and more immediate barometer of the situation than complex trade data. If ships are not passing through the strait, "it doesn't really change much of anything for markets," noted analyst Justin Low.
The selloff also hit digital assets, with Bitcoin, Ethereum, XRP, and Dogecoin extending recent losses. The drop highlights how cryptocurrencies are increasingly trading like other risk assets, vulnerable to macroeconomic and geopolitical shocks that drive investors away from speculative positions. The initial optimism for a ceasefire has given way to the realization that the conflict, and its economic consequences, may drag on for weeks or even months.
This article is for informational purposes only and does not constitute investment advice.
