Midday Mashup
Published
Map: The Gulf and Hormuz, marking Strait of Hormuz
The Strait of Hormuz standoff has moved from diplomatic friction to open confrontation. Iran's security chief Rezaei set a four to five day deadline for lifting the US naval blockade, and by midday the US had rejected Tehran's proposal to reopen the strait. Iran responded by canceling flights to Gulf neighbors, the UAE suspended Iranian carriers, and Yemen's Houthis reportedly fired missiles at Saudi Arabia. Oil has responded accordingly, with Brent trading above $108 a barrel and WTI up roughly $4 intraday, while natural gas futures jumped more than 6% after a pipeline issue, lifting the Natural Gas ETF 6.7%.
Treasury yields are surging alongside oil. The 10-year hit 5.17%, its highest since July 2007, and the 30-year touched a multi-decade high as well. Fed Chair Powell said September's inflation data drove the recent rate hike and signaled the central bank may need to raise rates again, comments echoed by Governor Barr and Fed official Paulson, who both pointed to inflation risks tied to the AI buildout and energy costs. The combination of tightening policy expectations and an oil spike is weighing on rate-sensitive and growth-linked equities.
Corporate moves are adding volatility on top of the macro backdrop. GoDaddy jumped 4.6% after the Financial Times reported Gen Digital is in early-stage talks to acquire the company, while Gen Digital itself fell 8.9% on the same report. MGM Resorts dropped 11.3% after a report that Barry Diller is withdrawing his bid for the company. First Solar fell 7.9% and Arm Holdings declined 6.4% amid broader semiconductor and clean-energy weakness tied to the risk-off tone. Rollins fell 6.8%, while Nebius Group rose 9.5%, Charles River Laboratories gained 6.6%, and Rocket Lab added 6.0%.
Against this, President Trump and China's Xi Jinping met in Washington, extending their trade truce by two months and discussing AI, chip export controls, Taiwan and Iran, with Xi voicing hope that the US and Iran can reach a nuclear agreement. Diesel markets whipsawed after Politico reported the White House was preparing a 90-day export ban, a claim the White House later called fake, sending US diesel futures down more than 7% before European diesel spiked in the opposite direction.