Iran told the United Nations overnight that "non-hostile" vessels can now transit the Strait of Hormuz safely, per Al Jazeera. That is the headline futures are surging on this morning.
Read the fine print.
What matters:
The S&P 500 fell 0.37% to 6,556.37 on Tuesday. The Dow dipped 0.18% to 46,124.06. The Nasdaq dropped 0.84% to 21,761.89. Futures this morning are pointing sharply higher, with S&P futures up around 0.9% and Nasdaq futures up roughly 1%.
Brent crude dropped below $100 per barrel overnight, falling around 5% on the Hormuz news, per Bloomberg. That is the first time oil has been below $100 since early March.
The 10-year Treasury yield pushed above 4.37% on Tuesday, per CNBC, its highest level in eight months. The rate hike repricing that started after the Fed meeting last week is accelerating.
The conditions matter more than the headline. Iran's UN statement specifies that ships must "neither participate in nor support acts of aggression against Iran" and must comply with Iranian safety regulations. Ships linked to the United States or Israel are explicitly excluded. Before the crisis, roughly 120 vessels transited the strait daily. On Monday, five ships were tracked passing through, per France 24. Going from five to maybe 30 or 40 is not the same as going back to 120. The energy market is pricing in a resolution that has not arrived yet.
The Trump administration sent Iran a 15-point ceasefire plan via Pakistan, per the New York Times. The demands: dismantle the nuclear program, halt all uranium enrichment, end funding to allied groups, keep the strait permanently open. In exchange, all sanctions would be lifted. Iran's military spokesperson mocked the proposal, per the Washington Post. The gap between what markets are celebrating and what the two sides are actually saying remains enormous.
The trade setup is splitting. If you are long XLE or oil majors, the question is whether this conditional opening holds and expands or collapses within days when the 15-point plan goes nowhere. Refiners with zero Middle East exposure, Valero (VLO) and Marathon Petroleum (MPC), lose some of their relative advantage if oil keeps falling, but they are also the safest energy names if talks fail and crude rips back above $110. Defense stocks (LMT, RTX, NOC) have not budged through any of these diplomatic cycles. That pattern is worth noting.
The story nobody is watching. Apollo Global Management (APO) capped withdrawals from its flagship private credit fund, Apollo Debt Solutions, at 45% of requested redemptions, per CNBC. The fund has a net asset value around $15 billion. Investors asked to pull 11.2% of shares outstanding in Q1. Apollo honored roughly $730 million of the $1.5 billion in requests. The private credit default rate has climbed to 5.8%, per Fitch. Blackstone relaxed its own redemption limits. Apollo held firm. If you own any non-traded BDC or private credit exposure, that is the canary in this mine.
Gold is trading around $4,400 per ounce, stabilizing after its steep multi-week selloff. Bitcoin is hovering around $71,000. Neither is reacting cleanly to the diplomatic headlines.
Worth bookmarking: The FRED 10-year Treasury tracker is the cleanest way to watch the yield move that is quietly repricing everything.
And France 24's Hormuz reporting has the full breakdown of the conditional opening and which ships are actually transiting.
