【US Stock Market Pre-Market】US Long-Term Treasury Yields at 4.3%, Six-Month High; Probability of Rate Hikes This Year Increases to 40% - Axios: Trump May Deploy Military to Take Over Iran's Kharg Island (Continuous Updates)

Oil price fluctuations. Axios citing four sources reports that the Trump administration is considering occupying or blocking Iran’s Kharg Island to pressure Iran to reopen the Strait of Hormuz. The island handles 90% of Iran’s oil exports. Taking control of the island could expose U.S. troops to greater risk of attack.

If successful, this could ease oil prices; if it fails, it could escalate conflict. Markets are betting on Trump’s stance, with Brent crude rising 2% at first, then fluctuating.

The report states such actions would only occur after U.S. forces further weaken Iran’s military capabilities around the Strait of Hormuz. “We need about a month to strike and further weaken Iran, take this island, and hold their critical points as leverage for negotiations,” a White House source said.

If approved, more troops would be needed. Currently, three different Marine units are heading to the region. A U.S. official said the White House and Pentagon are considering deploying additional forces as soon as possible.

However, inflation pressures remain high. The U.S. 10-year Treasury yield rose to 4.33%, a six-month high. The dollar index increased 0.3% to 99.52.

CME FedWatch expects the chance of a rate hike this year to increase from about 20% on Thursday (19th) to nearly 40%.

But Fed officials continue to advocate for easing. Fed Governor Michelle Bowman said she still supports three rate cuts by the end of the year to support employment, though she is watching Iran’s war impact. She believes it’s too early to judge the effects.

Another Fed official, Christopher Waller, said a closure of the Strait of Hormuz would signal greater inflationary pressures. While the situation is uncertain, it doesn’t mean the Fed will stay on hold for the rest of the year. He admitted that if U.S. employment weakens later this year, he would again advocate for rate cuts, emphasizing that there’s no need to raise rates now.

U.S. stocks opened lower. The Dow fell 260 points to 45,760; the S&P 500 declined 0.8% to 6,550; the Nasdaq Composite dropped 1.2% to 21,831.

In individual stocks, Super Micro Computer (SMCI) co-founder was indicted in New York for allegedly conspiring to illegally export AI technology worth billions to China. The news caused SMCI shares to plunge 27%, closing at $22.38.

Gold prices fell 0.8% to $4,568. Silver dropped 5.4% to $68.96.

Hong Kong stocks and ADR markets update on next page.