On Tuesday, U.S. Treasury Secretary Bessent said the U.S. and Iran are expected to reopen the Strait of Hormuz very soon. The plunge in oil prices eased inflation concerns and dampened market expectations that the Federal Reserve would raise interest rates more than once this year, sparking risk appetite in the market.
The U.S. Dollar Index traded sideways near the 100 mark, ultimately closing down 0.09% at 99.87. U.S. Treasury yields fell for the second consecutive day, with the benchmark 10-year Treasury yield closing at 4.616%;the yield on the 2-year Treasury note—which is sensitive to the Fed’s policy rate—closed at 4.202%.
Spot gold briefly surged past the $4,100 mark but failed to hold the level, ultimately closing up 0.55% at $4,077.48 per ounce;Spot silver retreated after touching the $60 mark intraday, ultimately closing up 2.29% at $59.53 per ounce. LME three-month copper broke through the $14,000 mark for the first time since June 3, as a surge in U.S. imports tightened global supply.
International oil prices plunged during the session as a potential breakthrough in the Strait of Hormuz standoff instantly sent shockwaves through the oil market. WTI crude fell for the second consecutive trading day, ultimately closing down 5.51% at $74.41 per barrel, hitting its lowest level since July 13;Brent crude ultimately closed down 5.55% at $78.42 per barrel.
All three major U.S. stock indices rose, with the Dow Jones Industrial Average closing up 1.7%, the S&P 500 up 1.73%, and the Nasdaq up 2.59%; the first two hit all-time highs.SK Hynix (SKHY.O) rose 8%, Micron Technology (MU.O) rose 7.6%, SanDisk (SNDK.O) rose 10.8%, NVIDIA (NVDA.O) rose more than 2%, and SpaceX (SPCX.O) rose 9.4%.The Nasdaq China Golden Dragon Index closed down 0.35%, while Alibaba (BABA.N) rose 1%.