Hormuz Deadlock and Fed Pause Bets Drive Two-Way Commodity Volatility

What happened

Trump intends to declare the Strait of Hormuz a US territory after the war with Iran, while Iran's deputy FM rejected this, stating Iran alone decides when the blockade ends. ADNOC reported two more vessels attacked in the strait. The S&P 500 and Nasdaq extended gains for a third straight week, while the Dow declined. Spot gold exceeded $4,440/oz for the first time since early June, and silver hit an eight-week high of $66.8/oz. Copper gained 0.6% to $14,160/tonne, and Brent and WTI touched two-week highs of $90 and $83.2/barrel respectively. US crude stocks posted a surprise 17.4-million-barrel build.

Why it matters

Geopolitical tensions over the Strait of Hormuz remain high, with diplomacy sliding backward. Traders are betting on a Fed pause due to softer inflation data, but supply risks and demand cuts from OPEC and the IEA are capping gains. Two-way volatility is expected next week as markets weigh geopolitical risks against disinflationary trends.