Markets staged a sharp intraday recovery Tuesday afternoon after President Donald Trump posted on Truth Social that he had ordered the U.S. Development Finance Corporation to provide political risk insurance and financial guarantees for all maritime trade transiting the Strait of Hormuz.
“Effective immediately, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the financial security of all maritime trade, especially energy, traveling through the Gulf,” Trump said on the social media platform Truth Social.
Trump also indicated that the U.S. Navy stands ready to escort tankers through the Strait of Hormuz.
The announcement offered the first concrete policy response to the energy supply disruption fears that had driven the session’s earlier selloff.
S&P 500 Cuts Midday Loss By More Than Half
By 2:50 p.m. in New York, the S&P 500 had trimmed its midday loss of 1.5% to just 0.6%, last trading at 6,842.
Other indices also trimmed earlier declines.
The Nasdaq 100 was 0.7% lower to 24,820, the Dow Jones Industrial Average declined 0.5% to 48,680 and the Russell 2000 dropped 1.1% to 2,625. The CBOE Volatility Index eased from its session high, last up 3.7% to 22.23.
Financials led the recovery, with the Financial Select Sector SPDR Fund (NYSE:XLF) turning positive, up 0.4%. The Communication Services Select Sector SPDR Fund (NYSE:XLC) also moved into the green, up 0.4%.
Materials continued to lag, with the Materials Select Sector SPDR Fund (NYSE:XLB) off 2.3%.
Trump Post Triggers Relief Rally: Top Movers Since 2:20 p.m. ET
According to Benzinga Pro data, the following names rallied most sharply in the 30 minutes following Trump’s Truth Social post:
| Name | % Change |
|---|---|
| Royal Caribbean Group (NYSE:RCL) | +1.36% |
| Dell Technologies Inc. (NYSE:DELL) | +1.16% |
| Blackstone Inc. (NYSE:BX) | +1.02% |
| Sea Limited (NYSE:SE) | +0.96% |
| Alibaba Group Holding Limited (NYSE:BABA) | +0.89% |
| Uber Technologies, Inc. (NYSE:UBER) | +0.89% |
| Comfort Systems USA, Inc. (NYSE:FIX) | +0.85% |
| AutoZone, Inc. (NYSE:AZO) | +0.84% |
| Airbnb, Inc. (NASDAQ:ABNB) | +0.81% |
| NextEra Energy, Inc. (NYSE:NEE) | +0.78% |
The rally in Royal Caribbean Group is particularly notable, as cruise operators had been among the session’s hardest-hit names on fears that the Iran conflict would depress consumer travel spending.
What To Watch Next
Trump’s post noted that more actions are to come, a phrase traders interpreted as an open-ended backstop for energy markets.
Whether the DFC mechanism proves sufficient to reopen normal Strait of Hormuz traffic — and whether the Navy escort threat accelerates a diplomatic resolution — remains the key question ahead.
Image via IAB Studio/Shutterstock
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