Iran and Oman announced their talks about reopening the Strait of Hormuz are in the final stages. Trump said a deal is close. Oil dropped. Stocks ripped higher. Retail traders checked their portfolios and pretended they knew where Oman was on a map this entire time.
The Strait of Hormuz has been closed or restricted or threatened or whatever since earlier this year. Twenty percent of the world's oil flows through that narrow passage when it's open. Nobody cared about this for months. Then Trump tweeted. Now it's the only thing that matters. Tomorrow it will matter zero percent again.
Oil prices fell because apparently we're getting that oil back. Stocks soared because cheaper oil means something something corporate margins. The S&P 500 added seventy points on the news that two countries most Americans couldn't locate with a gun to their head are almost done talking. Almost. Final stages. Close at hand. Any day now.
Here's what happens next. The deal gets announced. Markets rip for six hours. Then someone remembers the yield curve exists. Or inflation. Or whatever the excuse is that week. The strait reopens. Oil tankers resume their routes. Prices normalize. And every single trader who bought calls on this headline will be underwater by Friday, wondering why geopolitical breakthroughs don't override the fact that the market was already pricing in this exact outcome three weeks ago.
You bought energy stocks at the top of the fear trade. You sold them at the bottom of the relief rally. You did this because a former game show host said talks were going well. The Strait of Hormuz didn't move your portfolio. Your inability to ignore headlines did.
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