Stocks Pare Losses as Oil Eases on Hormuz Hopes: Markets Wrap
(Bloomberg) — Volatility eased across asset classes as oil’s early surge petered out, with stocks and bonds bouncing from session lows after Israel said it’s helping the US open the vital Strait of Hormuz.
The S&P 500 pared most of a 1% drop. US oil fell to $95 in post-settlement trading. Israeli Prime Minister Benjamin Netanyahu said Iran is no longer able to enrich uranium or manufacture ballistic missiles, adding the war will end a lot faster than people think. The US authorized the delivery and sale of some Russian crude. In late hours, FedEx Corp. gave a bullish outlook.
Treasuries rebounded from their worst point of the session after a rout driven by worries major central banks will be forced to tighten policy to keep price pressures in check. Across the Atlantic, Britain’s short-term yields jumped as the Bank of England “stands ready to act” against inflation.
Traders are parsing every geopolitical headline for indications on how long the war in Iran will last and whether tensions will continue to escalate from here.
Three weeks of conflict have upended the entire energy supply chain. With the Strait of Hormuz all but closed, gasoline and jet fuel prices are surging, cooking gas shortages are triggering fistfights in India and farmers are fretting about diesel and fertilizers.
“All the near-term action depends on the Strait opening,” said Scott Wren at Wells Fargo Investment Institute. “We think it opens in a matter of weeks, not months.”
Treasury Secretary Scott Bessent noted the US is looking to remove sanctions that it has long imposed on Iranian oil in an effort to lower surging energy prices triggered by the war. The White House doesn’t plan to ban the export of oil and gas, a Trump administration official said Thursday.
The duration of still elevated oil prices is exactly what the market is trying to figure out, and that’s why there is volatility, said Dennis Follmer at Montis Financial.
Wall Street is bracing for a large tally of options expiring Friday, which risks causing even more volatility. Roughly $5.7 trillion in notional options tied to individual US stocks, indexes and exchange-traded funds are due, according to Citigroup Inc., in the quarterly “triple-witching” event.
Iran maintained attacks on energy assets even after US President Donald Trump called for restraint. Complacent investors who assume there will be a swift resolution to the war are making a high-risk bet given how bad surging oil prices typically end up being for stocks, according to JPMorgan Chase & Co.’s Dubravko Lakos-Bujas.
“While a less damaging outcome in the Strait of Hormuz remains possible, recent events have narrowed that path and heightened the risk of continued volatility,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
While the S&P 500 bounced into the close, it was not able to finish above the key 200-day moving average.
Sentiment is likely still leaning negative, with more downside in store, according to Wren at Wells Fargo Investment Institute.
“We see a pullback in the 7-10% range from the record high as a good opportunity to step in,” he concluded.
Corporate Highlights:
Micron Technology Inc. warned that it will need to spend heavily on production to meet burgeoning demand, overshadowing a generally upbeat forecast. Alibaba Group Holding Ltd. aims to quintuple cloud and AI revenue to $100 billion annually in five years. One of Eli Lilly & Co.’s most highly anticipated experimental medicines helped diabetic patients lose more weight than any drug currently on the market. Darden Restaurants Inc. raised its full-year outlook as it expects an extra week of promotions at Olive Garden to lift sales. Uber Technologies Inc. plans to invest as much as $1.25 billion in Rivian Automotive Inc. to help launch a robotaxi fleet that will be available in the US, Canada and Europe over the next five years. What Bloomberg Strategists say…
“It’s no panic just yet but markets are waking up to a broader, more prolonged Middle East commodity shock than previously anticipated. If it persists, earnings will be next to crack.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 4 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 0.4% The MSCI World Index fell 0.7% Currencies
The Bloomberg Dollar Spot Index fell 0.7% The euro rose 1.2% to $1.1586 The British pound rose 1.3% to $1.3432 The Japanese yen rose 1.4% to 157.64 per dollar Cryptocurrencies
Bitcoin fell 1.3% to $70,278.74 Ether fell 2% to $2,142.87 Bonds
The yield on 10-year Treasuries was little changed at 4.26% Germany’s 10-year yield advanced two basis points to 2.96% Britain’s 10-year yield advanced 11 basis points to 4.84% Commodities
West Texas Intermediate crude fell 1.3% to $95.10 a barrel Spot gold fell 3.5% to $4,651.07 an ounce ©2026 Bloomberg L.P.
