Overview
- Global equity indexes logged new intraday and closing highs after a roughly 4–5% drop in crude prices that traders linked to U.S. comments about talks with Iran and prospects to reopen the Strait of Hormuz.
- U.S. officials publicly said progress toward reopening the strait was possible, while Tehran denied negotiations and isolated maritime incidents in the channel continued to be reported.
- A strong earnings season, with a high share of S&P 500 beats and SpaceX reporting nearly doubled Q2 revenue, gave markets fundamental support and lifted technology and AI-linked stocks.
- The slide in oil helped lower inflation expectations and pushed the U.S. 10-year Treasury yield down to the mid-4.6% range, which in turn supported higher equity valuations.
- The rally is fragile because it is concentrated in large-cap tech and export-exposed firms, and upcoming U.S. employment data plus further corporate results could quickly reverse sentiment if geopolitical tensions flare or data disappoints.