Progress in the Hormuz talks is encouraging, but the hardest issue still looks unresolved: what actually constitutes a full reopening and under what conditions. That leaves a meaningful geopolitical premium in oil. If negotiations hit another obstacle or shipping security deteriorates, USO could quickly retest recent highs and XLE would likely benefit.
At the same time, the weak July payrolls report has complicated the Fed story, so I would watch both oil and Treasury yields. For now, though, Hormuz remains the more asymmetric near-term catalyst because the market appears to be pricing in a fair amount of diplomatic progress already.
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