Markets Edge Upward as Strait of Hormuz Diplomacy Shifts

The potential reopening of this critical oil artery offers a rare reprieve from the energy-driven volatility that has dominated global trade. Iran’s conditions for the deal remain tied to U.S. policy, yet the prospect of unhindered transit has already begun to shift investor sentiment regarding the long-term outlook for oil prices.

Attention now pivots to the domestic front, where upcoming consumer and producer price indices will dictate the Federal Reserve’s next move. While inflation remains a primary concern, the labor market is showing signs of cooling. Following unexpected job losses in July, traders have recalibrated their expectations for a September rate hike, now assigning a 44% probability to such an increase.