Oil prices are climbing as hopes for a Strait of Hormuz deal fade, reigniting inflation concerns. President Trump demanded Iran pay for conflict-related deaths, pushing Brent crude futures to $90 a barrel. Rising U.S. and European bond yields reflect fears of inflation resurgence, with the 10-year Treasury yield hitting 4.7%. U.S. stock futures remain flat after yesterday’s losses, amid low trading volumes due to vacations and anticipation of tomorrow’s July inflation report.

The market’s caution stems from energy price volatility and geopolitical tensions. Higher oil costs could disrupt economic stability, influencing Fed policy and corporate earnings. Analysts note that prolonged uncertainty may delay market recovery.

Traders are also monitoring the July inflation data, which could sway monetary decisions. With summer travel reducing market activity, expectations for a swift resolution to the Hormuz issue or inflation control remain low. This dual pressure creates a fragile market environment.