Dow, S&P 500 Hit All-Time High After Bessent Says US-Iran Could Reach A Deal To Reopen Strait Of Hormuz

During an interview with CNBC, Bessent said that the U.S. is in talks with Iranians on allowing free navigation for commercial ships in the Strait of Hormuz.

• Bessent said that Iran’s missile production capability has been wiped out now due to the strikes undertaken by the U.S. on Iranian targets.
• He added that any positive development in the Middle East will benefit the world as the U.S. works to restore the flow of ships through the crucial Strait of Hormuz.
• He said that once the crucial waterway reopens, there are hundreds if not thousands of ships waiting in the region to go out.

U.S. equities soared in Tuesday morning’s trade after Treasury Secretary Scott Bessent said that the United States and Iran could reach a deal that would reopen the Strait of Hormuz.

During an interview with CNBC, Bessent said that the U.S. is in talks with Iranians on allowing free navigation for commercial ships in the Strait of Hormuz.

“There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict,” he said.

The Dow Jones Industrial Average (DJIA) soared 780 points to reach an all-time high of 53,983 before paring some of the gains. The S&P 500 index also surged to a new high of 7,658, rising about 0.7%, while the Nasdaq Composite rose about 1.2%.

Bessent Says Iran’s Missile Production Capability Has Been Wiped Out

Bessent said during the interview that Iran’s missile production capability has now been wiped out due to the strikes undertaken by the U.S. on Iranian targets.

He added that any positive development in the Middle East will benefit the world as the U.S. works to restore the flow of ships through the crucial Strait of Hormuz.

“Even though things are dicey there over the last few days, we saw quite a few ships coming out even now. I would expect the energy prices to settle back down, which I said will be good for the entire world,” he said.

Bessent added that once the crucial waterway reopens, there are hundreds if not thousands of ships waiting in the region to go out.

“It’s not just energy. It’s fertilizer, it’s refined products, it is the various industrial gases. We could see a big relief trade as those prices go down,” he said.

Crude Oil Prices Tumble

Crude oil prices continued to decline on Tuesday. U.S. West Texas Intermediate (WTI) crude futures expiring in September were down 5.25%, hovering around $76.11 a barrel.

Brent crude futures expiring in October fell 4.54% to hover around $79.97 a barrel.

The United States Oil Fund ETF (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) were down nearly 5% at the time of writing.

Meanwhile, Goldman Sachs expects crude oil prices to hover around $80 to $90 a barrel until there is either more clarity on the U.S.-Iran deal or a significant escalation in tensions between the two countries, according to a report by Al Jazeera.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.56%; the Invesco QQQ Trust ETF (QQQ) rose 1.8%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 1.04%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bearish’ territory.

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