US-Iran Tensions Spike as Hormuz Blockade Sends Oil Above $100

Oil prices surged 8% to approximately $105 per barrel following an announcement by US President Donald Trump to blockade the Strait of Hormuz. The move follows a breakdown in negotiations with Iran, shifting the US priority toward controlling critical oil transport routes in the region to manage future energy flows. The geopolitical shock arrives as investors closely monitor US inflation gauges. While the energy spike is a primary driver, recent Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) data indicate that inflationary pressures are accelerating independently of the Middle East conflict, with annualized rates trending higher over the last three to six months. This dual pressure of geopolitical instability and sticky inflation may force the Federal Reserve to maintain or even increase interest rates, despite political pressure to do the opposite. According to the CME FedWatch Tool, market participants currently anticipate no rate cuts until the second half of 2027. In the digital asset space, Bitcoin managed to maintain a weekly close above $70,000, ending near $70,850. While BTC preserved key technical levels, including the 200-week exponential moving average and its 2021 all-time high, some analysts warn that further corrections may be necessary before a definitive long-term trend reversal is confirmed. S&P 500 futures saw a modest decline of 0.6% in immediate response to the escalation.