Oil prices closed at multi-month lows on Friday, June 26, with Brent crude settling near $74 a barrel and US West Texas Intermediate around $69 — the weakest levels since late February — as tankers resumed transiting the Strait of Hormuz and Persian Gulf exports recovered toward roughly three-quarters of their prewar volumes. The slide capped a steep retreat from the wartime highs above $120 that crude reached when the strait was closed in March, and reflected a market increasingly confident that the US-Iran ceasefire would endure.
That confidence is about to be tested. Over the weekend, the United States and Iran exchanged strikes for a second time since the truce was signed, with Iran's Revolutionary Guard firing missiles and drones at US-linked sites in Kuwait and Bahrain in the early hours of June 28. Because oil and equity futures do not reopen until Sunday evening, the market has had no chance to react, setting up a potentially sharp repricing when trading resumes.
Analysts have warned that crude could gap higher at the open if traders judge that the escalation threatens the reopening of the strait, through which roughly a fifth of the world's oil passes. The scale of any move will depend on whether the weekend's strikes look like a contained round of enforcement or the start of a broader breakdown — and on whether Iran follows through on its warning of a 'broader' response.
Equities, meanwhile, head into the week already on uneasy footing. The S&P 500 finished Friday almost flat at 7,354.02, edging down 0.05 percent, while the Dow Jones Industrial Average slipped 0.09 percent to 51,876.11. The tech-heavy Nasdaq Composite fell 0.24 percent to 25,297.62, its fifth consecutive losing session.
The drag on the Nasdaq has come from a rotation out of semiconductor and other high-flying technology shares, which had led the market for much of the year. Chip stocks weakened further after a report that OpenAI is weighing a delay of its initial public offering into next year, citing the poor post-debut performance of SpaceX's stock and broader volatility in AI-related shares — a signal that investors are growing wary of the sector's stretched valuations.
The cross-currents leave markets caught between two forces. A renewed oil spike would feed directly into inflation, complicating the path for the Federal Reserve under its new leadership and pressuring consumer and industrial sectors alike. At the same time, an unwinding of crowded technology positions has left equity indexes vulnerable to any shock that prompts investors to reduce risk.
For now, the calm in oil rests on an assumption that the weekend's events have called into question. The first hours of trading on Sunday and Monday will reveal whether investors still believe the ceasefire framework will hold — or whether the slide in crude that defined the past two weeks is about to reverse.