[New York Stock Market] US-Iran Ceasefire "Fragile"... All Indexes Close Lower

International Oil Prices Surge Again
Yield on 30-Year U.S. Treasury Bond Surpasses 5%

As tensions rose again after Iran attacked a U.S. Navy escort ship attempting to pass through the Strait of Hormuz, all three major U.S. stock indexes closed lower on the 4th (local time), and the yield on the 30-year U.S. Treasury bond surpassed 5%.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,941.90, down 557.37 points (1.13%) from the previous trading day. The S&P 500 index, which is focused on large-cap stocks, fell by 29.37 points (0.41%) to 7,200.75, while the tech-heavy Nasdaq index dropped by 46.642 points (0.19%) to close at 25,067.801.

New York Stock Exchange. New York, USA – Special Correspondent Yoonju Hwang

On this day, investor sentiment weakened as the United States launched "Project Freedom" and tensions heightened in the Strait of Hormuz. The resumption of Iranian attacks on Gulf states also raised concerns that the ceasefire could collapse, leading to continued selling pressure through the end of the session.

According to Bloomberg and other sources, U.S. Central Command Commander Brad Cooper stated in a phone briefing with reporters that Iran launched cruise missiles at ships in the Strait of Hormuz and deployed drones, which were shot down by U.S. Navy vessels.

The Iranian attack took place immediately after U.S. Central Command announced that, with the launch of Project Freedom, two U.S. merchant ships had safely passed through the Strait of Hormuz. It appears to have been a show of force targeting the United States, involving the launch of missiles, drones, and fast boats.

Jay Hatfield, founder of Infrastructure Capital Advisors, said, "We do not expect the war to be resolved quickly," adding, "Since we do not believe Iran will suddenly abandon its nuclear capabilities, it is likely that a resolution will require the use of force, which is not something the market will welcome."

The United Arab Emirates (UAE) announced that a fire broke out at the Fujairah petrochemical complex due to missile and drone attacks originating from Iran. This marks Iran's resumption of attacks on the Gulf region just over a month after the ceasefire with the United States. Fujairah is home to a crude oil export terminal that can bypass the Strait of Hormuz.

As the ceasefire between the United States and Iran became increasingly fragile, international oil prices soared again. On the ICE Futures Exchange, July delivery Brent crude jumped 5.80% from the previous session to reach $114.44 per barrel. On the New York Mercantile Exchange, June delivery West Texas Intermediate (WTI) crude rose 4.39%, closing at $106.42 per barrel.

The bond market also reflected heightened anxiety. The yield on the 30-year U.S. Treasury bond broke through 5%. According to Investing.com, the 30-year Treasury yield rose by 4.7 basis points (1 bp = 0.01 percentage point) from the previous session to 5.013%. The increased military tension between the United States and Iran in the Strait of Hormuz pushed up international oil prices and, in turn, bond yields, fueled by concerns over rising inflation.

Previously, Michael Hartnett, Chief Investment Strategist at Bank of America (BofA), referred to the 5% yield on the 30-year Treasury as the "Maginot Line" in a note to investors. He also warned that if the yield breaches the 5% threshold, "the door to doom could open."

This content was produced with the assistance of AI translation services.