Hormuz, gold, and US jobs: three days that changed the price of risk.

Between Wednesday, August 5th, and Friday, August 7th, financial markets experienced three sessions dominated by a fragile equilibrium. On the one hand, the possibility of a de-escalation between the United States and Iran temporarily reduced the geopolitical premium on energy; on the other, the Strait of Hormuz remained a lever in Tehran's hands. However, the US labor market definitively changed the market tone, reopening the debate on the Federal Reserve's next move on Friday.

Hormuz: Diplomacy reduces risk, but does not eliminate it

The main geopolitical focus remains the Strait of Hormuz. Iran and Oman have reached a preliminary agreement on the coordinates of a potential trade route through the strait, while a broader proposal could give Tehran a role in controlling ships entering the Gulf. This would be a crucial step for markets, as the regular reopening of shipping would reduce one of the largest risk premiums embedded in energy prices.

The problem is that diplomacy continues to be accompanied by the threat of new restrictions. An Iranian parliamentary committee has examined a proposal to bar the transit of US, Israeli, and other vessels deemed "hostile." Oil's reaction was immediate: Brent rose 3.83% to $82.49 a barrel , demonstrating how much the market remains dependent on news from the Gulf.

The Black Sea becomes a second front for commodities

While investors' attention was focused on the Middle East, the Black Sea has also returned to being a major risk factor. The increase in attacks on Russian and Ukrainian ships, ports, and energy terminals has simultaneously begun to disrupt exports of oil, refined products, and grains.

The issue isn't just the quantity of goods temporarily blocked, but the rising cost of transporting them. Freight rates and war risk insurance have increased significantly, while some operators have suspended new orders through the region. The Black Sea thus joins Hormuz and the Red Sea in the list of geopolitical bottlenecks that can influence global inflation through energy and raw materials.

Gold and silver: geopolitics and the Fed are pushing in the same direction.

The most notable movement was seen in precious metals. In the first part of the period, gold gained over 4% , recording the largest daily acceleration in recent months, while silver rose about 4.4% . This wasn't simply a defensive move linked to geopolitics: falling bond yields and expectations of a less aggressive Federal Reserve also reduced the opportunity cost of holding non-interest-bearing metals.

Confirmation came on Friday. After the US jobs data, gold rose to around $4,336 an ounce , bringing its weekly gain to over 7% . The market thus combined two narratives favorable to the same asset: still-high geopolitical risk and a reduced likelihood of further rate hikes.

Stock markets at highs, but not all at the same level

Equities showed greater selectivity. On Wall Street, the Dow Jones initially gained 0.49% , closing at new highs, while the Nasdaq lost 0.83% , penalized by the weakness of some large technology names. The market has therefore not abandoned risk, but has begun to distinguish more between sectors and valuations.

In Europe, the momentum was more uniform. The STOXX 600 continued its march toward new records and closed at 658.19 points on Thursday. France, Italy, and Spain also reached new highs, buoyed by better-than-expected corporate results and the possibility that a diplomatic solution in the Middle East could reduce pressure on European energy costs.

Wall Street received a fresh boost on Friday: the Nasdaq rose about 1.3% and the S&P 500 refreshed its highs. Paradoxically, economic weakness turned positive for stocks, as it removed the prospect of further monetary tightening.

US jobs change Fed expectations

The first signs had already appeared mid-week. The ISM services index remained relatively solid at 54.1 , but the ADP report showed just 44,000 new private sector jobs , suggesting that labor demand was losing steam.

The real surprise came on Friday: July's non-farm payrolls recorded a loss of 23,000 jobs , versus expectations for a gain of 80,000 . This figure, combined with the negative revisions of previous months, rapidly changed expectations about the Federal Reserve. The implied probability of a hike as early as September dropped to 44% , transforming the readings of all major asset classes in just a few hours.

Treasuries also reacted. After rising to 4.674% driven by oil prices and inflation fears, the 10-year US yield fell again after the payrolls. On the currency market, the dollar index retreated towards 99.50 , while the euro recovered to the $1.1568 area. A weaker dollar further supported gold and risky assets.

Two opposite risks, the same rally

Between August 5th and 7th, the market therefore had to simultaneously price in two seemingly opposing scenarios. A solution to the Hormuz crisis would reduce energy and inflation risks, benefiting equities; a slowdown in the US labor market, on the other hand, would reduce pressure on the Fed, supporting Treasuries, technology, and precious metals.

So far, this combination has produced a peculiar result: stocks near or above their highs, gold accelerating, and bond yields falling . However, this isn't necessarily a stable equilibrium. The market continues to oscillate between two variables capable of rapidly changing direction: geopolitics determines the price of energy, while macroeconomic data determines the price of money. And right now, both are changing simultaneously.