The Middle East war is nearing its fourth week and the Strait of Hormuz remains a choke point with global consequences. This morning, stock futures pointed lower, volatility ticked higher, and the small-cap Russell 2000 looked especially fragile. The market is trying to process two messages at once. The first is alarming: reports say the Trump administration is considering moves as severe as occupying or blockading Iran's Kharg Island to force Tehran to reopen the Strait of Hormuz. The second message is meant to calm everyone down. Treasury Secretary Scott Bessent has floated possible relief measures: lifting sanctions on Iranian oil already at sea, releasing more crude from the U.S. Strategic Petroleum Reserve, and coordinating with allies such as Japan to do something similar. In other words, Washington is simultaneously helping prosecute a war and hunting for extra barrels to soften the economic backlash from that war.
