Oil prices fall, stocks rally after Trump pauses Strait of Hormuz opening for possible deal
US President Donald Trump said on Tuesday that while the operation to reopen the Strait of Hormuz will be paused, the blockade will remain in force.
A drone view of a pump jack and drilling rig south of Midland, Texas, US Jun 11, 2025. (File photo: Reuters/Eli Hartman)
HONG KONG: Oil prices extended losses and stocks rallied on Wednesday (May 6) on fresh hopes for an end to the Iran war and the reopening of the Strait of Hormuz
Investors welcomed Donald Trump's decision to pause efforts to help stranded ships through the crucial waterway, which drew Iranian attacks, threatening an already fragile ceasefire.
The announcement came hours after Secretary of State Marco Rubio said the offensive side of the US campaign, called "Operation Epic Fury", had concluded.
"The operation is over - Epic Fury - as the president notified Congress. We're done with that stage of it," Rubio told reporters at the White House.
Oil prices sank around 4 per cent Tuesday, and on Wednesday they continued to fall, with West Texas Intermediate briefly dipping below US$100 a barrel.
The cheaper oil prices provided support to equities, with investors taking their cue from another record day for the S&P 500 and Nasdaq, fuelled again by tech firms.
Hong Kong, Shanghai, Sydney, Wellington, Taipei, Manila and Jakarta were all up.
"Investors found some reassurance in comments from President Donald Trump ... despite ongoing disruption to shipping routes," said Fiona Cincotta, a senior market analyst at City Index.
"Investors are also finding some reassurance in the fact that the diplomatic push to resolve the conflict continues."
She added that strong US earnings were also boosting risk appetite as they had largely been in line with forecasts.
However, she added: "Sentiment remains vulnerable. Even US entities could face serious headwinds should the Strait of Hormuz remain closed for an extended period."
