President Trump Reinstates Blockade on Strait of Hormuz as Oil Prices Rise and AI Stocks Face Pressure
Oil prices jumped on Monday following a weekend of military strikes in the Middle East. Brent crude climbed 9.6% to $83.30 as the United States and Iran both claimed control over the Strait of Hormuz. The administration announced a reinstated blockade to prevent tankers carrying Iranian oil from using the waterway. President Trump also called for 20% payments on all cargo shipped through the strait to reimburse the United States for providing regional protection. While energy prices rose, stock markets faced downward pressure from the artificial-intelligence boom. The S&P 500 fell 0.8%, while the Nasdaq composite sank 1.6%. Investors expressed concern that high stock prices for chip companies may not be sustainable if AI fails to deliver expected productivity. Notably, Nvidia fell 3.5%, weighing heavily on the S&P 500. Meanwhile, Treasury yields rose to 4.61% on the 10-year note as investors braced for potential interest rate hikes to combat inflation caused by expensive oil.