Oil Whipsaws, Stocks Hit Record as Iran Sends Mixed Signals on Hormuz

A ship transiting the Strait of Hormuz was struck Tuesday even as diplomats worked to reopen the critical waterway, according to Dow Jones Newswires. The strike landed in the middle of a day when Wall Street was partying like the Middle East crisis was already solved.

Treasury Secretary Scott Bessent told markets a deal with Iran to reopen Hormuz could come "today or tomorrow." Oil sold off hard on that comment. Then reality reasserted itself. The strike on a ship moving through the strait is a reminder that a Treasury Secretary's optimism and an actual ceasefire are two very different things.

Markets have gotten ahead of themselves on Iran before. Dutch bank ING put it bluntly: "we've been in this situation multiple times before, only to see things unravel." ING's caution proved warranted within hours, when the new strike hit right after oil had already tumbled on Bessent's comments.

The mixed signals are coming from both sides. President Trump said the U.S. offer of talks represented Iran's "last chance." Tehran, for its part, said it's only negotiating with Oman as an intermediary and has no plans for direct talks with Washington. That is not the language of two sides on the verge of a signed deal, whatever the Treasury Secretary suggested.

Wall Street didn't seem to care about the contradiction. The Dow Jones Industrial Average closed at a fresh record the day before, and futures kept climbing Tuesday morning. Tech led the charge. Palantir Technologies jumped more than 15% in premarket trading after posting strong earnings the previous night, according to Dow Jones. Tickmill Group summed up the mood: "Stocks are close to records, tech is regaining leadership, and manufacturing data are improving. But oil is still hostage to Middle East diplomacy."

Equity investors are betting on AI-driven earnings and a Fed that isn't in a rush to tighten further. Oil traders are stuck reading tea leaves out of Tehran and Washington, getting whipsawed every time an official says something optimistic that isn't backed by an actual signed agreement.

The economic data underneath the noise

Away from the Iran headlines, the U.S. trade deficit actually improved in June. Imports fell 1.8% from May to $388 billion, while exports dropped a smaller 0.9% to $314.7 billion, narrowing the trade gap to $73.3 billion from $77.6 billion in May, according to Dow Jones Newswires. A shrinking deficit is generally good news for GDP arithmetic, though a chunk of that move reflects softer import demand rather than a surge in what America is selling abroad.

Canada posted a different story: a widening goods-trade surplus, with both exports and imports hitting all-time highs. Dow Jones reported gold shipments helped offset a pullback in oil prices on the export side. A softer Canadian dollar also played a role in pushing trade values to records, one report noted.

Investors were also watching for the June JOLTs report on job openings, due out Tuesday, as the market continues to digest last week's Federal Reserve meeting. ING noted policymakers held rates steady but that "uncertainty over the policy path remains elevated as investors weigh persistent inflation risks against signs of moderating economic momentum." The Fed didn't move, and nobody's sure what it does next.

A packed earnings slate is doing its own work on sentiment

Earnings season is in full swing and doing plenty to prop up the record-chasing mood independent of geopolitics. Merck, Pfizer, McDonald's and Caterpillar were on deck to report Tuesday morning, with Advanced Micro Devices reporting after the close.

Elsewhere in corporate news, warehouse landlord Prologis agreed to buy British rival Segro for $18.8 billion, according to Dow Jones. Wells Fargo announced plans to roll out tokenized deposits for corporate clients, joining a growing list of banks embracing blockchain rails for payments.

The open question heading into Tuesday afternoon is whether Bessent's "today or tomorrow" timeline on Hormuz survives contact with the latest strike. If Iran's Foreign Ministry sticks to its position of talking only through Oman, and Trump's "last chance" framing holds, oil traders have every reason to stay skeptical of any rally built on diplomatic optimism alone. The strait remains the tell: it opens when ships stop getting hit, not when a Treasury Secretary says a deal is close.