Wall Street 'Shocked' by Trump's Remark... US Stocks Plummet, Oil Prices Soar

▲ Strait of Hormuz, US, Iran, Brent crude, rising oil prices/AI-generated image

As fears of a collapse in the ceasefire between the US and Iran resurfaced, the Dow Jones Industrial Average dropped by 650 points and international oil prices surged by over 5%, reigniting geopolitical fears on Wall Street.

According to economic news outlet MarketWatch on July 8 (local time), the US stock market started with a sharp decline amid concerns that the unstable ceasefire between the US and Iran could falter. The Dow Jones Industrial Average fell by about 650 points, and the S&P 500 and Nasdaq indices also showed weakness.

The epicenter of the market shock was international oil prices. International oil prices jumped over 5% in New York morning trading, reaching approximately $78 per barrel. Concerns that a renewed conflict between the US and Iran could hinder the expansion of Persian Gulf oil shipments through the Strait of Hormuz stimulated buying. The yield on US 10-year Treasury notes also rose by 2 basis points, reaching 5.57%.

The US Central Command announced that it had struck more than 80 targets in response to an incident suspected of involving Iran attacking three oil tankers. The Iranian Revolutionary Guard Corps claimed to have launched retaliatory attacks targeting US military bases in the Gulf region. The US also withdrew its measure that had lifted sanctions on Iranian oil sales for 60 days.

US President Donald Trump's remarks heightened market tensions. Trump stated about the ceasefire with Iran, "I think it's over," and when asked about the possibility of a full-scale resumption of hostilities, he said, "There's a strong possibility of hitting hard tonight." However, he left open the possibility of continued negotiations with Iran.

The surge in energy prices emerged as a new variable for inflation and interest rate outlooks. Ipek Ozkardeskaya, Senior Analyst at Swissquote, stated, "If energy prices rise due to geopolitical tensions, recently eased inflation expectations could quickly reverse." Investors are also closely watching the Federal Reserve's June Federal Open Market Committee meeting minutes, which are to be released today.

[Article Key Summary]

-Amid concerns of a collapse in the ceasefire between the US and Iran, the Dow Jones Industrial Average dropped by about 650 points, and the S&P 500 and Nasdaq indices also showed weakness.

-International oil prices rose by over 5%, reaching approximately $78 per barrel, and the yield on US 10-year Treasury notes recorded 5.57%.

-The exchange of attacks between the US and Iran, along with Trump's hawkish remarks, heightened market instability surrounding energy prices, inflation, and interest rate outlooks.

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