US Markets React to Iran Deal Reopening Strait of Hormuz

The news indicates that the opening of the Strait of Hormuz under the Iran deal will reduce supply concerns and weigh on oil prices. Technical indicators also support the decline: the RSI is near oversold territory at 32.8, the MACD is below the signal line, and the price is below both the 20-day and 50-day moving averages. The 3.5% drop in the last 24 hours signals continued selling pressure. In the short term, the downtrend is expected to persist, though some corrective buying is possible due to oversold conditions.

The news serves as a positive catalyst for the market, driven by expectations of reduced geopolitical risks and lower energy costs. Technical indicators support this optimism: the RSI at 58 remains in neutral territory with upside potential, while the MACD shows positive momentum above its signal line. The price trading above the 20-day SMA indicates a strong short-term trend. However, the price hovering near the 50-day SMA, which could act as resistance, suggests that the upside may be limited. Therefore, while a short-term upward move is expected, excessive optimism should be avoided.

The news is positive for the market, driven by expectations of reduced geopolitical risks and lower energy costs. NDX had a strong session, rising 2.43%, with the RSI at 60, maintaining upside potential without entering overbought territory. The MACD is above the signal line and in positive territory, confirming short-term upward momentum. The price is trading above the 20- and 50-day moving averages, supporting the bullish trend. However, it should be noted that the impact of the news may have been partially priced in, and the market could undergo some consolidation.

The reopening of the Strait of Hormuz could positively impact energy sector stocks by reducing geopolitical risks to oil supply. Although Exxon Mobil (XOM) shares fell 1.2% in the last close, the RSI at 38 is approaching oversold territory, indicating potential for a short-term recovery. While the MACD remains in negative territory, the news flow and oversold signal from technical indicators increase the likelihood of an upward move in the stock within 1-3 days. However, the upside may be limited as the stock is trading above both the SMA20 and SMA50.