Stocks dropped and oil soared on Monday as tensions between the U.S. and Iran flare up again.
The S&P 500 fell 0.79%, while the tech-heavy Nasdaq Composite underperformed, falling 1.55% dragged by chipmakers. Sandisk, Intel and Micron Technology were among the companies whose shares fell the most. The Dow Jones Industrial Average fell 0.26%.
SpaceX's stock also underperformed, getting close to a key level: its IPO price. Shares of the company dropped more than 4% and stand below $140. The company's IPO price was $135 and made its trading debut at $150 on June 12.
The eyes of the world are again set on the Strait of Hormuz following renewed clashes between the U.S. and Iran.
In this context, President Donald Trump said that the U.S. will collect revenue from protecting ships passing through the key waterway and is again imposing a blockade of Iranian ports.
Speaking to Fox News' Fox and Friends, the president criticized Tehran, accusing it of breaking agreements between the countries to cease hostilities. "We had a deal. it was a done deal. and then they broke it. they always break it."
He went on to claim that the U.S. is going to "keep the strait" and "probably run it."
"We will become the guardian of the strait, and we should be reimbursed for that," Trump added, saying that the U.S. "we can't be expected to do that for nothing like we have for many years."
"Wow we're going to guard it and we're going to get paid for guarding it, a lot of money," Trump claimed.
The president later said in a social media publication that the U.S. will reinstate the blockade of Iranian ports, noting that "it is only stopping Iran's ships or customers from entering or leaving."
"All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as "THE GUARDIAN OF THE HORMUZ STRAIT," but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."
Oil soared on the developments. Brent crude, the international benchmark, climbed more than 9% and stood above $83 per barrel. West Texas Intermediate, the U.S. benchmark, gained almost 9% and clocked in at $77.80 at 4:03 p.m. ET.
