Iran Weighs Short Pause in Strait of Hormuz Shipments

A person familiar with Iran's deliberations said Tehran is considering a short-term pause of shipments through the Strait of Hormuz to avoid provoking a U.S. blockade and to protect ongoing peace talks.

The halt would be temporary and aimed at preventing an escalation that could derail negotiations. The person did not give timing or specify which types of cargo would be affected. Iranian officials are weighing the pressure a pause could apply against the risk of a military response or tighter enforcement by U.S. forces in the narrow waterway.

Financial markets reacted to signs of possible de-escalation. A market strategist noted the S&P 500 had returned to pre-conflict levels despite the market disruption and the loss of roughly 400 million barrels of oil. S&P 500 futures rose about 19 points during the session, and the strategist estimated investors have priced in a high probability of a peace agreement.

Investor attention also shifted to developments in artificial intelligence. The release of a new model by a major AI developer helped drive gains in software stocks. Traders said the IGV software exchange-traded fund jumped about 5.4% in one session, a move market participants linked in part to short-covering and renewed interest in AI-related software opportunities.

Oil prices moved lower on the reports. U.S. West Texas Intermediate crude fell $2.69 to $96.43 a barrel, moving back toward levels seen late last week as markets priced in a lower risk of shipping disruptions and weighed broader demand and supply data.

Economic releases added context for traders. The weekly ADP employment report showed the four-week average of private payroll filings rose to 39,250, the highest reading for that series since it began tracking the average. Market participants were also awaiting U.S. producer price index data, the Federal Reserve's minutes from its last meeting, and public remarks from Fed officials Mary Daly and Christopher Waller.

The Strait of Hormuz is a key route for oil and liquefied natural gas exports from the Persian Gulf, and interruptions there typically have immediate market effects. Iran has used shipping measures in the past as leverage, but officials appear cautious about actions that could trigger direct confrontation with U.S. forces patrolling the region.

No immediate comment was available from Iranian authorities or U.S. naval commanders. Diplomats and analysts said the outcome of Tehran's deliberations and the progress of the peace talks will be closely watched by energy markets and investors in the near term.