1. Moving the market

Stocks opened sharply lower after President Trump announced that the U.S. was reinstating what he described as a blockade on Iranian shipping in the Strait of Hormuz, sending oil prices soaring.

In a series of posts on Truth Social, Trump said the U.S. would act as the “Guardian of the Hormuz Strait” and proposed a 20% fee on cargo shipments to cover the costs of securing the critical shipping lane.

The latest escalation follows a weekend of military exchanges between the U.S. and Iran.

While Tehran claimed it had closed the Strait of Hormuz after targeting U.S. facilities in several Gulf countries, Trump pushed back on that assertion, maintaining that commercial traffic through the waterway remains open.

For now, the market appears stuck in a trading range as investors wait for greater clarity from the Middle East. Semiconductor stocks took a heavy hit, dragging the broader tech sector lower, while bank shares also came under pressure ahead of earnings season.

Not surprisingly, the Nasdaq was the weakest of the major U.S. indexes, breaking below its 50-day moving average once again.

Meanwhile, bond yields moved higher as investors positioned themselves ahead of tomorrow’s closely watched CPI report.

The dollar initially sold off but quickly reversed higher, putting pressure on both gold and Bitcoin.

Gold managed to hold above the $4,000 level by the close, while Bitcoin slipped back toward $62,000. Rising expectations for additional rate hikes further dampened enthusiasm for precious metals and cryptocurrencies.

The recent rotation out of technology stocks remains one of the market’s key themes.

The big question now is whether this is simply a temporary shift in leadership before money flows back into growth stocks—or the early stages of a more cautious and bearish market environment.

1. Moving the market

Stocks moved higher right out of the gate, led by strength in semiconductor shares and aided by a pullback in oil prices, as traders looked past renewed tensions between the U.S. and Iran and focused on the broader market outlook.

According to U.S. Central Command, the U.S. conducted a second consecutive day of strikes against Iranian targets. The latest military action followed Tehran’s attacks on commercial shipping in and around the Strait of Hormuz, a key global trade route where traffic has already been disrupted.

Despite the escalating conflict, crude oil prices moved lower after President Trump indicated that Iran had reached out to negotiate a deal.

That marked a sharp shift in tone from recent comments, which included suggestions that negotiations may no longer be worthwhile and that the previous ceasefire arrangement between Washington and Tehran was effectively over following another round of attacks in the region.

For now, hopes for a quick return to normal export flows through the Persian Gulf appear increasingly uncertain. As a result, geopolitical risks remain elevated and could spark bouts of risk-off trading if tensions continue to escalate.

That said, the market’s attention remains firmly on earnings season and the ongoing AI-driven growth story.

Many traders believe those two factors could continue providing enough fuel to push equities higher, even in the face of geopolitical uncertainty.

Meanwhile, falling bond yields helped support stocks, while a weaker dollar boosted precious metals. Gold rebounded above $4,100, and bitcoin also caught a bid, climbing back toward the $63,000 level.

With investors seemingly shrugging off the latest military strikes and oil prices moving lower instead of higher, are the bulls showing remarkable resilience—or is the market becoming a little too comfortable with rising geopolitical risks?

1. Moving the market

Stocks came under pressure early in the session after President Trump told attendees at the NATO summit that the ceasefire with Iran was effectively over, reigniting concerns about escalating tensions in the Middle East.

The comments sent oil prices sharply higher and sparked a risk-off move across much of the market.

Adding to the unease, Trump later suggested that further military action against Iran could be imminent. His remarks came on the heels of what the U.S. described as a series of powerful strikes against Iranian targets in response to attacks on commercial vessels transiting the Strait of Hormuz.

As oil surged, energy stocks moved higher, while consumer-focused companies, which could be hurt by rising fuel costs, lagged. Chip stocks, meanwhile, found their footing after coming under pressure in the previous session.

The renewed geopolitical tensions disrupted what had become a fairly complacent market narrative. After weeks of optimism surrounding a potential de-escalation in the region, traders suddenly found themselves reevaluating geopolitical risks.

Despite the shaky backdrop, the Nasdaq managed to break away from the broader weakness and finish with a modest gain as dip-buyers stepped in to support the tech sector.

Elsewhere, bond yields moved higher as investors priced in the possibility that rising energy costs could reignite inflationary pressures and keep interest rates elevated for longer.

The dollar saw a round-trip session, while gold recovered from an early decline before closing slightly below the $4,100 level. Bitcoin, however, failed to participate in the tech rebound and ended the day lower.

For now, it appears that many traders have already moved past the Iran story, with several of the sectors and stocks most affected by the conflict fully reversing their initial reaction.

But if tensions continue to escalate, could the market be underestimating the risks ahead?