The controversy surrounding the Strait of Hormuz added to market volatility on Thursday as investors closely watched the progress of the U.S.-Iran peace talks.
The U.S. Dollar Index fell and then rose, before continuing to rise after Iran’s still limited opening of the Strait of Hormuz, ending up 0.26% at 98.26. U.S. bond yields rallied, with the benchmark 10-year U.S. yield closing at 4.391%, and the 2-year yield, which is sensitive to the Federal Reserve’s policy rate, closing at 3.913%.
While market expectations that the U.S. and Iran may be close to an interim deal eased inflation concerns, the central point of contention was put on hold limiting the precious metals’ gains. Spot gold showed an inverted V trend, the U.S. market from the highs above $4,760 / ounce back down, erasing all the intraday gains, and finally closed down 0.08% at $4,687.24 / ounce; spot silver trend was similar, and finally closed up 1.4% at $78.43 / ounce.
International oil prices rebounded in a deep V. WTI crude rebounded in response to Iran’s introduction of new rules for the Strait of Hormuz to continue its efforts to institutionalize control of the waterway, ending up 1.45% at $99.27/bbl; Brent crude ended up 0.79% at $101.25/bbl.
The three major U.S. stock indexes retreated collectively, with the Dow closing down 0.63%, the S&P 500 down 0.38%, and the Nasdaq down 0.13%, while Arm (ARM.O) fell 10%, Tesla (TSLA.O) gained 3%, and Intel (INTC.O) and Micron Technology (MU.O) fell 3%. The Nasdaq China Gold Dragon Index closed down 1.4 percent.