Oil Prices Plummet While US Stock Markets Break Records

Oil prices are falling sharply, while US stock markets are setting new records. Traders are betting that the Strait of Hormuz will reopen, which is shaking up the energy market significantly. Bitcoin is not yet benefiting from the risk appetite in the markets.

In short:

• Brent and WTI oil fall more than 13% this week to $79 and $75 respectively.
• The Dow Jones closes at a record level of 54,085 points and the S&P 500 at 7,736.
• Bitcoin remains stuck around $64.000 despite the positive sentiment in stock markets.

Oil prices at lowest level in weeks

Brent crude oil is down more than 13% this week to $79 per barrel. WTI, the US benchmark, is at $75. These are the lowest levels since 13 July. The decline is due to market participants pricing in a reopening of the Strait of Hormuz, a crucial shipping route for oil tankers in the Middle East.

The sharp decline is clearly visible on the chart: after peaking around $86, the price falls back to $79 in a short period. The market is thus reacting directly to the geopolitical news surrounding the shipping route.

US stock markets at record highs

Meanwhile, investors are celebrating on Wall Street. The Dow Jones closes at a record level of 54,085 points and the S&P 500 ends at 7,736. Nearly all sectors are in the green, with strong gains among technology companies. Intel rises more than 10%, AMD is up 7% and Broadcom climbs over 6.6%. Palantir also stands out with a daily gain of nearly 30%.

The broad market movement shows that investors are seeking risk now that geopolitical tensions in the Middle East appear to be easing. Cheaper oil also acts as a stimulus for the economy, further fuelling the positive sentiment on the stock market.

Bitcoin lags behind on risk appetite

Remarkably, Bitcoin is barely participating in the risk appetite in the markets. The price is hovering around $64.021, a rise of only 0.7% in the past 24 hours. Normally, Bitcoin moves in tandem with moments when investors dare to take risks, but that pattern is not visible now.

Whether Bitcoin will still respond to the improved market conditions remains to be seen. For now, the price remains stuck in a narrow range around $64.000, while stocks and commodities have already clearly reacted to the news about the Strait of Hormuz.