Oil Surge and CPI Vigil Pin Markets as Hormuz Crisis Deepens

Global equity markets traded cautiously on August 11 as the five-month-old US-Iran military conflict continued to strangle shipping through the Strait of Hormuz, keeping energy markets on edge and inflation fears elevated ahead of a critical data release. The S&P 500 slipped -0.32% to close at 7,728.20, while the Nasdaq shed -0.60% to 26,445.45 — both indices holding well above their 50-day moving averages of 7,505 and 26,014 respectively, but the undertone was defensive. WTI crude gained another 1.30% to settle at $83.20/barrel, extending a rally that has now pushed prices roughly 24% above pre-conflict levels, with intraday spikes to $89 on Brent reinforcing the durability of the supply shock. The 10-year Treasury yield eased modestly, falling 0.32% to 4.68%, though it remains acutely elevated and well above its 200-day moving average near 4%, a level that continues to reprice risk assets and mortgage costs economy-wide.

The Hormuz standoff remains the dominant macro variable. Periodic Iranian attacks on commercial shipping and retaliatory US airstrikes have kept transit volumes near a standstill for most of the past five months, against a normal flow of 73–130 vessels per day. A prior memorandum of understanding collapsed in July, and while Pakistan's statement that 'the situation is moving toward peace' briefly capped oil's gains on August 11, no confirmed ceasefire or new diplomatic framework is in place. IEA member-state strategic petroleum reserves are approaching critical depletion levels, removing one of the traditional shock absorbers for supply disruptions of this magnitude. The 30-year Treasury yield trading near 20-year highs reflects the market's growing conviction that the inflationary impulse from sustained $83+ crude is not transitory.

Copper's approach toward a record $14,000 per tonne on the LME added another layer of inflationary pressure to the commodity complex on August 11. The move was driven by a partial Democratic Republic of Congo copper concentrate export ban, acute warehouse tightness, and aggressive pre-tariff stockpiling by US buyers ahead of the Section 232 regime — which currently imposes a 50% levy on semi-finished copper products and was expanded in April 2026. A pending Commerce Department ruling on whether to extend these tariffs to refined copper is widening the COMEX-LME arbitrage spread and creating additional volatility. Gold, meanwhile, rose 0.49% to $4,383.00/oz, consolidating recent gains as a stagflation hedge; its RSI of 66.7 signals momentum but not yet overbought exhaustion, though prices remain well below the 200-day moving average at $4,494 — a level that will be watched closely on any further energy-driven inflation shock.

The Reserve Bank of Australia's unanimous decision to hold its cash rate at 4.35% landed with a hawkish inflection that kept AUD rate expectations elevated. Governor Michele Bullock explicitly cited Middle East fuel-price uncertainty as a key upside inflation risk, and the board's deliberations were confined to a hold or a hike — cuts were not discussed. This mirrors the posture of the Federal Reserve, which held rates at 3.50%–3.75% at its July 29 meeting while markets have now largely abandoned expectations for 2026 easing, with some pricing renewed hike risk given the energy price trajectory. The US Dollar Index barely moved, closing at 99.82 — notably below its 20-day moving average of 101 and with an RSI of 41.2, suggesting the dollar is losing its traditional safe-haven premium as fiscal and inflation dynamics cloud the US macro picture.

All eyes on August 12 at 8:30 a.m. ET when the BLS releases July CPI — arguably the most consequential inflation print of the year. June's report showed a 0.4% month-over-month decline and a 3.5% year-over-year gain, but that data predates the current acute phase of the Hormuz-driven oil surge. A hotter-than-expected July reading, particularly in energy and core services, could reignite rate-hike pricing and test the S&P 500's resilience at current levels, where the index trades with an RSI of 62.7 — elevated but not technically overbought. Any diplomatic breakthrough in the Hormuz negotiations would represent a larger near-term catalyst than the CPI itself, but given that full sanctions relief on Iran under the Iran Sanctions Act requires Congressional action — not merely an executive order — the timeline for any lasting resolution and traffic normalization remains deeply uncertain even in an optimistic diplomatic scenario.