The fragile ceasefire between the United States and Iran collapsed on Wednesday after Iranian forces attacked three commercial tankers in or near the Strait of Hormuz, triggering a swift and forceful American military response. US Central Command announced that it struck approximately 90 Iranian military targets overnight, including air defense systems, coastal surveillance assets, missile and drone storage sites, naval capabilities, and military logistics infrastructure along Iran's coastline — the most intensive single wave of US strikes since the conflict began in late February.
President Trump declared the ceasefire "over" during a press conference in Ankara, Turkey, where he was attending a NATO summit, adding that he may no longer be interested in negotiating a deal with Tehran. "For me, I think it's over," Trump said when asked about the status of the agreement. "They can talk, but I think they're wasting their time." He later told reporters aboard Air Force One that Iran "called a little while ago" and "want to make a deal so badly," leaving market participants uncertain about whether de-escalation remains on the table despite the renewed military exchange.
Iran retaliated by firing missiles at three US-allied Gulf states — Qatar, Bahrain, and Kuwait — sending alerts through those countries and raising concerns about the broader regional implications of the breakdown. The US Treasury Department simultaneously revoked its authorization for Iranian oil exports, reimposing the sanctions that had been temporarily lifted as part of the now-defunct memorandum of understanding.
The energy market's response was immediate. West Texas Intermediate crude settled 4.4% higher at $73.52 per barrel, while Brent crude futures gained 5.4% to $78.19, as traders priced in heightened risk of disruption to the Strait of Hormuz, through which roughly one-fifth of the world's traded oil and liquefied natural gas passed before the conflict began. Energy stocks ConocoPhillips and Marathon Petroleum rose 2.1% and 5.4%, respectively, while oil-field services and refining names benefited broadly from the crude price move.
Equity markets showed a bifurcated response that underscores how the 2026 conflict has reshaped cross-asset correlations. The Dow Jones Industrial Average fell 1.1%, or 576 points, to close at 52,348.39, with 24 of 30 components finishing in negative territory. The S&P 500 slipped 0.3% to 7,482.71. However, the Nasdaq Composite gained 0.2%, closing at 25,870.65, as AI-related technology names continued to trade on their own earnings and upgrade-driven momentum rather than following the geopolitical selloff. Nasdaq-100 futures were up 0.7% Thursday morning, pointing to further divergence between AI-adjacent tech and the rest of the market.
Goldman Sachs outlined two scenarios for oil in the coming weeks: a normalization path in which flows return to late-July levels if negotiations resume and sanctions are eased, or a severe disruption scenario if the conflict escalates further. Russia also imposed a temporary ban on diesel exports through July 31 after drone strikes on its refinery infrastructure, adding a separate supply-side pressure on refined petroleum products independent of the Iran situation.
About 6,000 seafarers remain trapped in the Strait of Hormuz area, according to the International Maritime Organization, whose secretary-general condemned the latest exchanges as placing innocent civilian mariners in grave danger. Shipowners and insurers are expected to further restrict transits through the strait in the near term, which would keep tanker freight rates elevated regardless of the political outcome.