Stocks and bonds slide as Trump's China trip fails to reopen Strait of Hormuz
Wall Street stocks and US Treasury prices fell sharply after President Trump's China visit ended without a deal to reopen the Strait of Hormuz. Investors said fears of a 2022-style inflation problem are returning, though some still see room for a Trump pivot on the Iran conflict.
US stock and bond markets came under joint selling pressure on Friday after President Donald Trump's China visit ended without a concrete agreement to reopen the Strait of Hormuz. Investors said the assumption that the Iran war-driven energy shock would dissipate quickly is now being reconsidered, with implications for global shipping and inflation.
The Dow Jones Industrial Average fell more than 500 points, with technology stocks among the heaviest decliners. In Treasuries, the 10-year yield extended its move higher, reflecting a market that has begun to price the next Federal Reserve move as a possible rate hike rather than a cut.
Strategists said the risk of slipping back into a 2022-style inflation cycle is being reassessed, though some commentary still leaves room for a Trump diplomatic pivot on Iran. US inflation data due in the coming days, comments from Fed officials and developments around Hormuz are likely to set the near-term direction for stocks and bonds.
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