The biggest shift has been in oil. As fears of a prolonged supply shock through the Strait of Hormuz eased, crude gave back a meaningful portion of its war premium. Brent crude dropped to about $93.48 before later trading around $95.92, while West Texas Intermediate (WTI), a U.S. benchmark for crude oil prices, fell to about $96.27, signaling that traders were beginning to price in a lower risk of immediate energy disruption.
That move in oil helped drive a broader recovery across markets. U.S. stock-index futures surged as investors rotated back into risk assets, and the relief trade carried into equities with the S&P 500 up 0.6%, the Dow up 0.6%, and the Nasdaq up 0.8%. At the same time, the 10-year Treasury yield fell roughly 10 basis points to around 4.2%, reflecting lower near-term inflation pressure and renewed expectations that the Fed may still have room to ease later this year.
What is causing the move is relatively straightforward: if the ceasefire holds, the odds of a deeper supply shock, higher energy costs, and another inflation spike all come down significantly. That improves the outlook for equities, takes some pressure off bond yields, and helps stabilize broader market outlook.
Sources: CNBC
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